Hot property: Two more shopping centres sold as east coast demand soars

The appetite for retail shopping centre properties on the east coast of Australia shows no sign of dissipating, with the announcement today of two further sales of regional assets in Pottsville, on the north coast of Northern New South Wales and in the northern Gold Coast suburb of Biggera Waters.

Pottsville Central Shopping Centre, located at 11-13 Coronation Street in Pottsville on the far north coast of Northern New South Wales was sold for $10.2 million to private investors and the Metro Market Centre, less than 12km from the Gold Coast CBD, was sold for $39.4 million to an undisclosed Melbourne-based private investor.

The deals follow hot on the heels of yesterday’s news that managed property investment fund EG acquired a 50 per cent stake in the Grand Plaza shopping centre in the Brisbane suburb of Browns Plains for $215 million.

“We are seeing enormous ongoing demand and capital available for convenience retail that meets consumers’ daily needs, while supply remains tight,” said Jon Tyson, the director of retail sales at Savills, who brokered both of today's deals.

The Pottsville property is a 908sqm single-level shopping centre consisting of a supermarket and four shops, including an Australia Post, with on-site parking for 20 vehicles. Situated on a site of 1,962sqm, it has a 15-year lease to IGA which runs until 2029 and has a yield of 4.58 per cent.

Nestled between Byron Bay and Coolangatta, the property attracted strong interest from private investors, with eight registered bidders hotly contesting the asset and pushing the sale price above expectations.

Tyson said demand for convenience-based shopping centres continues to outstrip supply, with buyer interest in retail investments in the Tweed/Byron region particularly robust.

The Metro Market neighbourhood shopping centre in Biggera Waters is a two-level mixed-use retail centre with a gross letting area (GLA) of 6,967sqm. Sitting on a 10,980sqm site, the property consists of a Drakes Supermarket, 33 speciality tenancies, on-site parking for over 400 vehicles and a 2,500sqm office component.

“The sale of Metro Market illustrates the wider demand for retail assets from all investor groups including private investors, property syndicates and fund managers,” Tyson said.

The centre, which has a weighted average lease expiry (WALE) of around three years, was previously held by Sydney based boutique fund manager Argus Property Partners in a managed fund since 2015.

The Gold Coast, Australia’s sixth-largest city, continues to attract significant retail investment capital, with this latest sale following a range of other significant transactions, including Benowa Gardens for $60.5million as well as stakes in Pacific Fair, Runaway Bay Village, Harbour Town and Westfield Helensvale totalling close to $3 billion.