A neighbourhood shopping centre in Melbourne’s south-east anchored by a Woolworths supermarket has sold to Chinese interests for $48 million, the latest in series of retail acquisitions by Asian investors.
Over the past 15 months, Chinese investors have spent more than $380 million acquiring retail shopping assets across Victoria.
The latest, the Arena Shopping Centre in Officer on the corner of Princes Highway and Cardinia Road, exchanged on an initial yield of 5.38 per cent, a price predicated on its larger than normal size compared to traditional neighbourhood shopping centres, CBRE’s Mark Wizel said.
Mr Wizel, Justin Dowers and Kevin Tong negotiated the sale to a mainland Chinese buyer from Shenzhen.
As well as a 4100-square-metre Woolies supermarket, the unusually large shopping centre has a BWS on a 20-year lease, 25 specialty retailers, and a freestanding McDonald’s and Caltex Service Station, both on 20 and 15-year leases respectively.
Only one other neighbourhood centre has sold this year in Victoria.
Earlier this month private syndicator Henkell Brothers Investment Managers paid $32.1 million for the Hastings Central Shopping Centre, on the Mornington Peninsula, on a 6.2 per cent yield.
The Hastings centre was anchored by a Kmart, Aldi supermarket and 13 specialty shops.
The scarcity of neighbourhood shopping centres offered to the market has underpinned stronger results.
“The limited supply of centres both in Victoria and nationally is ensuring those that do come to market are achieving sharp yields,” Mr Dowers said.
Mr Dowers said activity was likely to pick up this year as institutional investors moved to take advantage of prime conditions to reweight their portfolios, shed non-core assets and recycle the capital.
Late last year in December a Chinese investor paid $43 million to purchase the Springhill Shopping Centre on a 5.5 per cent yield.
Packington Strand Shopping Centre was offloaded two months earlier by diversified property group Charter Hall to a Chinese buyer for $31.8 million on a 4.92 per cent yield.
Mr Wizel said the Arena sale was a “strong statement for the overall confidence that buyers have for retail assets”.
“Only a few years ago, there were questions being raised around oversupply of retail centres in Pakenham … if anything, there is a widely accepted view in planning that more retail floor area is needed to service the booming population,” he said.