Investors come hard for Queensland retail properties
West Australian-based syndicator Properties & Pathways has expanded its Queensland holdings by snapping up a large format retail centre in Townsville for $16 million as retail transactions in the state jump.
Neighbourhood shopping centre and large format retail deals are rising strongly in Queensland despite a slow down in transactions nationally.
Properties & Pathways managing director Cal Doggett says that while Townsville has faced a challenging period after the mining downturn, the group is confident the market is set to pick up.
Commercial Insights: Subscribe to receive the latest news and updates
The centre — the Woolcock Street Supa Stores — was sold by a North Queensland based private developer on an initial yield of 7.42%.
The 7563sqm centre is fully leased to four national tenants, including Fantastic Furniture, which accounts for 45% of the income.
“It’s easy to get sidetracked by a lot of noise when buying against trend but we looked past this and identified with Woolcock Street Supa Store because of the strong property fundamentals,” Doggett says.
CBRE’s Peter Rossi, Michael Hedger and Joe Tynan negotiated the sale with Quinlan Property Group’s Michael and John Quinlan.
“Townsville’s diverse and growing economy was one of the key drivers of buyer interest, with Infrastructure Australia forecasting the city will become Australia’s largest regional centre outside of the Pilbara by 2031,” Rossi says.
In another major deal, Alceon Group and CPRAM Investments this week sold a dominant Coles supermarket, Peregian Springs Shopping Centre, to private entity associated with part of the Oxenford family.
The family-backed company paid about $41.5 million, reflecting a tight initial passing yield of 5.35% for the Sunshine Coast centre.
The complex is a small high quality 4772sqm neighbourhood centre, securely anchored by Coles and has 14 specialty tenancies.
Townsville’s diverse and growing economy was one of the key drivers of buyer interest, with Infrastructure Australia forecasting the city will become Australia’s largest regional centre outside of the Pilbara by 2031
It has an extensive weighted average lease expiry of 7.5 years, and is 99.6% occupied. The centre last traded in 2012 for $20.425 million but was actively remixed over the last five years.
The deal was handled by Hatcher, Jacob Swan and David Mathews of JLL and Rossi and Hedger of CBRE
Elsewhere in Queensland, the listed Shopping Centres Australia bought Sugarworld Shopping Centre in Cairns from an unlisted fund run by ISPT for $24.75 million.
The deal, negotiated by Hatcher and Swan, saw the convenience-based neighbourhood centre, 15kms south of the Cairns CBD, change hands at a tight yield.
That centre is anchored by a Coles supermarket and is supported by 12 specialty retailers and a Coles Express service station pad site.
This article originally appeared on www.theaustralian.com.au/property.