$17.5m Bay Central sale boosts Hervey Bay market
A Melbourne-based private investor has bought Hervey Bay’s Bay Central Shopping Centre, handing the region’s retail market its biggest boost in years.
The $17.5 million sale of the shopping centre, which comprises three freestanding buildings totalling 6452sqm of net lettable area and car parking for 270 vehicles, is positioned on 2.69 hectares of land with three street frontages.
The purchaser also acquired an adjoining 9127sqm parcel of vacant land for an additional $1.7 million on a 12-month deferred settlement period.
They plan to use the land for future expansion.
Regional shopping centres remain very tightly held, with the demand from the investment community far outweighing the number of assets available on the market
Linda Bland, principal of Century 21 Commercial Hervey Bay, says it is one of the biggest retail deals Hervey Bay has seen in several years, since 2011’s $71 million acquisition and subsequent $115 million redevelopment of Stockland Hervey Bay Shopping Centre, which is directly opposite.
Bland says the Hervey Bay retail sector is showing signs of recovery, with an increasing level of investor interest in the region, and should mirror the growth seen in Brisbane and the Sunshine Coast.
“We are still in a recovery phase and are a long way off the growth that we are seeing in the much larger capital cities but there is a lot of good stock available,” Bland says.
Bland says the growth is being driven by the region’s affordability, desirable climate and lifestyle, which ensured the region’s population growth consistently remained above the Queensland average.
Bland, with Stewart Gilchrist, national director of retail investment services at Colliers International, jointly marketed Bay Central for sale via expressions of interest campaign.
Interest is coming from all sectors of the market: institutions, syndicates, property trusts and private individuals
Gilchrist says: “Regional shopping centres remain very tightly held, with the demand from the investment community far outweighing the number of assets available on the market.”
“Interest is coming from all sectors of the market: institutions, syndicates, property trusts and private individuals.”
Although the purchaser wished to remain anonymous, it is understood they have a significant history of investment in Hervey Bay and own a number of other properties within the immediate vicinity.
Bland says there had been a high level of interest in Bay Central Shopping Centre as it was a “business and finance hub”.
The property’s three freestanding buildings are anchored by the six major banking institutions – Westpac, NAB, Suncorp, Commonwealth Bank, Bank of Queensland and ANZ – which together contribute over 50% of gross rental income for the centre.
It is thought the yield on the property will be about 9%.
The other tenants in the centre include Australia Post and Cash Converters, plus a recently agreed long-term lease with the Fraser Coast Chronicle, which occupies 684sqm.
Gilchrist says Bay Central contains all the ingredients of a quality property investment and while it does not contain a supermarket, it does contain an above average component of quality national retailers.
“That, coupled up with the population growth dynamics of Hervey Bay, which is well above the Queensland average, are great components of a long term stable investment,” he says.
Bay Central, located at 135 Boat Harbour Dr, was originally owned by CRI Bay Central Project Pty Ltd, a subsidiary of Melbourne-based Hostplus.
Spiros Deftereos, of Hostplus, says the property is not core to their property portfolio so the decision was made to divest it.