Woolworths sells Aveley shopping centre in WA yield record

The Woolworths Aveley shopping centre sold for $27 million.
The Woolworths Aveley shopping centre sold for $27 million.

Supermarket giant Woolworths has sold a suburban shopping centre in Western Australia for a whopping $27 million.

A private investor nabbed the 4919sqm Woolworths Aveley centre on Millhouse Rd in Perth’s outer northern suburbs this month.

The deal sets a new state record for the sharpest initial yield for a neighbourhood centre over $20 million, at 5.81%.

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Cushman & Wakefield Retail Investments’ Nick Potter says it comes as demand for assets in the sector is red hot.

“Investor appetite remains at extremely high levels for well performing non-discretionary convenience-based centres, and the significant levels of interest in Woolworths Aveley are testament to this trend,” he says.

Built in 2016, the centre has a near 100% occupancy rate, anchored by a Woolworths supermarket with a 12-year lease term, as well as BWS on a long-term lease, eight specialty stores, two kiosks, one ATM and a pad site medical centre.

Fellow agent Sashi Makkapati says the strong activity within the asset class in Western Australia is set to continue.

“Neighbourhood shopping centres remain one of the most liquid asset classes, with 16 transactions completed during Q2 and Q3 2018 totalling more than $505 million,” Makkapati says.

“Private investors also continue to be attracted to these assets given the ticket size, and are paying sharp yields for quality centres with strong underlying fundamentals and growth prospects.”

The Woolworths property attracted several offers from potential buyers due to its high-profile location with a an industry award-winning residential community known as Vale Aveley, developed by Stockland.