Queensland shop demand reaches Vincent
A lack of opportunities in the metropolitan market is driving an increasing appetite for regional Queensland shopping centre assets.
In the latest deal, Vincent Market Place in Townsville has sold in an off-market transaction for $16.7 million.
Sydney-based boutique fund manager Horizon Capital Management sold the centre to an undisclosed private investor in a deal understood to reflect a tight passing yield close to 6%.
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Savills national director of retail investments Peter Tyson, , who brokered the deal, says the tight yield was reflective of a wider market trend.
“The last 24 months have seen enormous yield compression in all sectors, the key driver of which is today’s historically low interest rates,” Tyson says.
Competition amongst buyers for investment grade retail assets is as strong as we have ever seen
“Notwithstanding the yield compression we have already seen, the depth of buyer competition and low cost of debt are likely to see it continue.”
The enclosed 4956sqm Vincent Market Place shopping centre is anchored by a strongly trading 3069sqm Woolworths supermarket, supported by 14 specialty shops and three ATMs, with grade level parking for 200 cars.
“Competition amongst buyers for investment grade retail assets is as strong as we have ever seen.
“The Coles and Woolworths covenants continue to be amongst the most sought-after in the market.”
In 2012 Horizon carried out an expansion of the supermarket and a refurbishment of the centre, which is located in the Townsville suburb of Vincent.
The deal comes as Colliers International released a research and forecast report on the retail market, highlighting the changing nature of regional shopping centres and their increasing dominance as activity centres.
The Coles and Woolworths covenants continue to be amongst the most sought after in the market
In particular, the report notes that regional shopping centres are shifting away from being purely a place for shopping and instead increasingly becoming mixed use, with additions such as residential, hotel and office space are becoming more commonplace.
The report reveals that almost one million square metres of new regional centre space is expected to be added to the market nationwide over the next five years.
In 2016 alone 11 centres are scheduled to undergo major expansions, with the largest of these being the expansion of Westfield Northlakes, on the northern outskirts of Brisbane, Colliers says.
Meanwhile, in 2017 the largest project to be completed will also be in Queensland, with the doubling in size of Toowoomba’s Grand Central, by QIC.