CHINESE BUYER SNARES CHELSEA CENTRE FOR $8.3M

CHINESE BUYER SNARES CHELSEA CENTRE FOR $8.3M

LASCORP Development Group continues to cash in on a growing investor appetite for retail assets, selling the Chelsea Beach Arcade to an offshore Chinese investor for $8.3 million.

The deal, struck at a passing yield of 6.3 per cent, follows the retail developer's sale earlier this year of Woolworths Culburra Beach for $9.4 million on a particularly tight yield of 4.97 per cent.

The two-level arcade is located along Chelsea's beachside, offering 11 specialty retailers, including Anytime Fitness, BWS and Bakers Delight.

The sale follows a series of sub-$10 million deals in the Victorian retail sector in the past two months, including Strathfieldsaye Plaza, which sold for $6.75 million to a local buyer, 68-82 Canterbury Road in Canterbury, which sold at auction for $8.9 million to a local Chinese investor, Oakleigh IGA, which sold prior to auction for $3 million to an offshore Chinese investor, and Gisborne Foodworks which sold for $7 million to an offshore Chinese investor.

CBRE Victorian Retail Investments' Mark Wizel, Justin Dowers and Rorey James negotiated the deals.

"We are experiencing significant demand from offshore investors seeking secure, income producing investments," Wizel says.

"This includes a growing number of Chinese investors who are looking outside of the Melbourne CBD and becoming increasingly comfortable with outer metropolitan locations, particularly those underpinned by strong fundamentals.

"Chelsea Beach Arcade in particular was a very attractive buy for offshore Chinese investors, given its waterfront location and the convenience of its location relative to the neighbouring supermarket and train station.

"Chinese buyers focus on long-term growth and this asset provides that given its apprised attributes.

"We are seeing a shift by offshore investors from development sites to more income producing and secure assets, driven by the recent turmoil in the Chinese equity market and the recent devaluation of the yuan."

Dowers says the rise in retail investment sales shows confidence of both offshore and locally based investors, with offshore buyers profiting off Australia's lowest dollar in six years and local buyers making the most of record low interest rates.

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