Prime time over for neighbourhood shops?
Investor interest in neighbourhood shopping centres has dipped in the last year, in a sign the buying frenzy that characterised previous purchasing seasons could be over.
Savills says it has recorded $1.2 billion of neighbourhood shopping centre transactions nationally in the 12 months to June 2016, less than half of the $2.6 billion recorded in the previous year and down on the five-year average of $1.4 billion.
In its recently published Spotlight on Australian Neighbourhood Shopping Centres, Savills says in the year to June 2016, 56 neighbourhood shopping centres were sold, compared to 91 the previous year, although the figure is commensurate with the five-year average of 60 sales per annum.
But Savills Research says despite the decline institutions remain active in the market, acquiring 39% of all neighbourhood shopping centres sold in the year to June.
Private investors also continue to pursue neighbourhood shopping centres but are now being outpriced by institutions, while foreign investors have emerged as a buying force, snapping up 29% of neighbourhood shopping centres sold.
They are trends the owners of Marketplace Deagon shopping centre in Brisbane’s northern suburbs will be hoping to tap into, after the centre was placed on the market via an expressions of interest campaign.
Stewart Gilchrist of Colliers International and Peter Tyson of Savills are jointly handling the sale process on behalf of its local private vendors.
Marketplace Deagon is a modern neighbourhood centre anchored by the 2374sqm Prince’s Supa IGA and five mini-major tenants, including The Reject Shop, Good Price Pharmacy Warehouse, a childcare centre, Healthworks Fitness Centre and Rackley Swim School. Those six tenants take up 86% of the net lettable area.
The centre is fully leased with a net annual income of about $1.708 million, which, combined with a long weighted average lease expiry of almost 12 years, means the centre is expected to draw strong levels of investor enquiry.
The centre, located at 55-57 Braun St, Deagon, also features 10 specialty traders including national and chain brand tenants such as Mater Pathology, BWS, Subway and Pizza Capers.
“Marketplace Deagon is quite a unique offering in the marketplace due to the strong anchor weighting and security of income,” Tyson says.
“The centre is not only anchored by a major supermarket, but features a strong line up of five mini-major drawcards, each of which are major traffic generators.”
Deagon is an outer suburb of Brisbane, about 17km north of the CBD.
The site is spread over 14,070sqm, while the centre’s floor area is 6004sqm, with parking for 225 vehicles.
Expressions of interest close on September 29.