This article is from the Australian Property Journal archive
TWO separate neighbourhood shopping centres have sold for nearly $70 million combined as neighbourhood shopping centre transaction volumes continue to trade strongly.
Coolum Park Shopping Centre on the Sunshine Coast has sold for $32.5 million, while Market Plaza Chipping Norton in NSW has sold for $37.4 million on a yield of 4.75%.
Both are convenience-based neighbourhood retail assets, anchored by strong performing Woolworths and Coles supermarket respectively. They were sold by JLL in off-market and on-market campaigns.
JLL’s Nick Willis said the convenience and large format retail sectors continue to attract the strongest investor interest and highest conviction given the sector’s outperformance over the past 24 months.
“The investor interest is broad; ranging from private high-net-worth investors, global pension and sovereign funds and the A-REITs all looking to increase scale in what is a highly fragmented market.
JLL research shows that $2.7 billion worth of neighbourhood shopping centres transacted in 2021, trading at a 81% uplift compared to the year prior, and up 45% and 64% on the five and 10 year averages, respectively.
Andrew Quillfeldt of JLL said the recent spike in COVID-19 case numbers is likely to re-introduce many of the trends evident over the last two years during periods of restricted movement, resulting in an increase in spending on grocery and large format retail.
“The strength in underlying sales performance in these two main categories will continue to support investor confidence and demand for neighbourhood and LFR shopping centres.
“Although there is some economic uncertainty in 2022, consumer confidence remains positive and the household sector is in a good position to be supportive of retail spending across all categories.”
Willis said supply of investment product remains a key issue for this part of the retail market, with demand drastically outweighing available supply.
“This imbalance will continue to drive yield compression and potential for further M&A and strategic partnerships in 2022,” he said.
