Second time lucky for Geelong’s Corio Central?
New owners will have the opportunity to reposition one of the city’s busiest shopping centres ahead of the biggest residential expansion of Geelong’s northern suburbs.
Corio Central is back on the market as listed owners Vicinity Centres restarts its asset sell-off program.
Simon Rooney, JLL’s head of retail investments for Australasia, says the high-yielding sub-regional centre anchored by Coles, Woolworths and Kmart has long leases in place until at least 2025.
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But Rooney says it offers strategic repositioning opportunities, with a secure cash flow and historically high occupancy rates.
Corio Central is worth about $115 million and held a yield of 7.5%.
Food is the biggest driver of consumer spending at Corio Central, accounting for 60% of the main trade retail expenditure of $711 million.
Spending is tipped to reach $943 million by 2028 as the main trade area population expands.
But it is Geelong’s northern growth area at Lovely Banks, just 2km north of the centre, that offers the potential to expand Corio Central’s main trade population.
Rooney says investors are targeting high-yielding small and mid-sized sub regional centres, like Corio Central, with a major focus on retail services as well as food and beverages.
“Food and beverages has consistently been the fastest growing retail category over the past five, 10 and 20 years, which underpins solid leasing demand,” he says.
Corio Central was originally listed in 2018 as Vicinity sought to free up cash to fund expansions to its major new centres in Melbourne.
Its smaller sister centre, Belmont Village, sold for $58 million in that campaign.
Rooney says transaction activity is highest in the $50 million to $150 million bracket in 2018, with a string of significant local deals including a $117 million transaction of Leopold’s Gateway Plaza, an Newcomb’s Bellarine Village also selling to a private investor for $36.5 million.
A 50% stake in the region’s biggest centre at Waurn Ponds remains on the market.
“Buyers see relative value in retail assets given the widening spread to other asset classes and attractive income returns available for quality neighbourhood and subregional centres.
“Investors are opportunistically making tactical retail acquisitions to take advantage of the pricing disparity between sectors and individual assets,” Rooney says.
This article from the Geelong Advertiser originally appeared as “Geelong’s growth gives buyers the chance for change at Corio Central”.