Singapore’s Rockworth Capital Partners has outbid domestic players to nab the recently completed Brisbane sub-regional shopping centre Town Square Redbank Plains for an estimated $160 million.
The newly completed centre, which comprises approximately 26,945sqm of GLA, incorporated the expansion of the existing 5,900sqm neighbourhood centre known as Redbank Plains Shopping Village, anchored by a 3,200sqm Woolworths supermarket, into a major sub-regional shopping centre.
The centre also comprises Coles and Aldi supermarkets, a Target DDS, two drive-through tenancies, a large format tenant precinct, specialty tenancies and at grade and basement parking for over 1,200 cars.
JLL’s Simon Rooney, head of retail investments for Australasia, and Sam Hatcher negotiated the sale of the town centre on behalf of Alceon Captrans JV to Singapore-based Rockworth Capital Partners, representing a core capitalisation rate of 6.25 per cent.
“We’re seeing a very clear trend towards offshore investors increasingly driving acquisitions of quality Australian sub-regional assets – a trend that’s been building and gaining momentum in 2017,” Rooney said.
He said sub-regional retail is the preferred asset class for many offshore groups seeking quality retail exposure, given the defensive and resilient characteristics and positive in built growth outlook.
“Assets which are predominately food, service and convenience-based, with a high proportion of non-discretionary retail and limited fashion, offer enhanced and consistent returns and limit trading volatility. The lower rental profile of sub-regional centres also provide attractive opportunities for income and capital growth, via asset repositioning and tenancy re mixing,” said Rooney.
According to Rooney, the comparative attractive yield profile available in the Australian retail sector continues to offer strong relative value for offshore investors.
“Domestic institutions are also keenly pursuing sub-regional centres to secure above-benchmark total returns through active management and asset repositioning,” he said. The latest being the Charter Hall acquisition last week of Salamander Bay (NSW) for circa $175 million and reinforces the significant current interest in the sub-regional sub-sector.”
“Combined with the current circa $3.5 billion Blackstone retail portfolio sale process, the current series of transactions would be expected to drive retail investment activity in Australia to a new record high in 2017.”
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