A private Gold Coast family has fended off competition from national investors to snare a major large format retail property at Burleigh Heads for $72.5m as the sector continues to draw big capital players.
The family picked up the Burleigh Home + Life, anchored by major retailers Anaconda, Autobarn and Beacon Lighting, from Gordon Corp.
The property, which was formerly a part of the Kaufland divestment, is at 197-207 Reedy Creek Rd, adjacent to the major Stockland Burleigh Heads shopping centre. Gordon Corp successfully repositioned the site as a lifestyle retail centre.
The deal, negotiated by Colliers’ Steven King and James Wilson and JLL’s Jacob Swan, Sam Hatcher and Ned McKendry, was the highest price paid for a large-format retail centre in Queensland in more than three years amid a highly competitive campaign.
The sale was struck at a capitalisation rate of 4.68 per cent, with the property delivering a net annual income of about $3.39m fully leased and a weighted average lease expiry of 8.3 years.
With a net lettable area of 11,656sq m and a site area of 3.285ha, it is a strategic holding in the retail-industrial heart of Burleigh Heads, one of the Gold Coast’s most exclusive and sought-after catchments.
“It is incredibly exciting that a local family was able to fend off institutional capital after having been pipped on several occasions on similar offerings,” Colliers’ Mr King said.
“The local family’s acquisition reflects the high quality of the development, and depth of capital targeting retail investments within the Gold Coast.”
Anaconda, Autobarn, and Beacon Lighting occupy more than 85 per cent of the centre, which also counts RSEA Safety and Choice the Discount Store as major tenants.
Colliers’ Mr Wilson said more than $500m in offers were received from private and institutional investors.
“Aggressive bidding resulted in multiple parties making offers below 5 per cent yield,” he said.
The centre is in the retail-industrial heart of Burleigh Heads.
Players including HomeCo and QIC have been buying.
JLL’s Mr Swan said the centre was supported by an effective tenancy mix comprising non-discretionary retail, medical services and food and beverage facilities.
“It ticks the boxes in terms of internal investment parameters for many private and institutional investors,” he said.
“Convenience-based assets offer resilient income streams and a non-discretionary tenancy base, providing investors with confidence despite inflationary economic conditions. It is these assets that will continue to outperform throughout 2022.”
Large format retail performed through the pandemic and yields have compressed by 105 basis points since the end of 2019.
Spending on household goods has surged above pre-Covid levels with sales growth spurred by working from home and lockdowns now flowing over into strong renovation activity.
A host of large format retailers are also looking to expand their operations.
Article source: www.theaustralian.com.au