Geelong supermarkets stack up for investors

Geelong West’s Pakington Strand shopping centre sold to a Chinese investor in 2016 for close to $32 million.

More Asian and institutional cash is expected to flow to the Geelong region as major property investors seek to reap the rewards of strong population growth and higher retail spending. 

CBRE national director for retail investment properties, Mark Wizel predicts growing interest in neighbourhood shopping centres after recent sales showed Geelong retail properties offered growth levels on a par with Melbourne properties but without the level of competition that retailers might expect in outer Melbourne suburbs.

Among recent major transactions are the $36 million sale by Coles of its Torquay Village centre to Toorak-based investor David Feldman and Sydney-based Centuria Property Group’s acquisition of TAC’s waterfront headquarters for $115.25 million.

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Wizel also cites major investments by Vicinity Centres in the $72 million expansion at Leopold’s Gateway Plaza and Melbourne-based Asian investors ICD Property in the $200 million Gen Fyansford development. Melbourne-based Jinding Australia is also planning a $100 million estate at Armstrong Creek.

Wizel traded Geelong West’s Pakington Strand shopping centre on behalf of Charter Hall for close to $32 million in 2016 to a Chinese buyer.

Torquay Village Shopping Centre Geelong

Toorak-based investor David Feldman secured the Torquay Village shopping centre for $36 million recently.

“We are starting to see a fair bit of Asian capital moving to the Geelong region,” he says.

“We’re also starting to see more Asian developers taking on projects in Geelong and on the outskirts.

“For example, ICD Property, who are a Melbourne-based Chinese developer who are doing the estate at Fyansford. Next door to them is the Lee family (Riverlee), who are a Malaysian group.”

“That’s a good sign for the market. Asian buyers are very much confidence buyers. If they see someone else doing it, they feel comfortable doing it themselves.”

Forecasts of continued population growth is giving investors confidence that investing in Geelong will provide capital growth, he says.

Geelong residential development

Asian-backed developers like ICD Property are investing in Geelong’s urban sprawl. Picture: Alison Wynd.

Geelong’s population is increasing at 3.2% a year with the number of residents expected to grow 32% to 325,779 by 2036.

The Bellarine Peninsula population is expected to balloon 63% over the same period.

The city’s ability to attract new employment industries, like WorkSafe, TAC and NDIA created a sound base for investors.

Property advisory consultancy Macroplan Dimasi’s manager retail, Ellis Davies says more affordable housing than Melbourne, new employment opportunities, and lifestyle considerations are driving population growth.

This article from the Geelong Advertiser first appeared as “Geelong supermarkets stack up with strong returns for buyers”.