An offshore investor has beaten seven other competitive bids to snap up a neighbourhood shopping centre in the booming Brisbane-Gold Coast corridor for $37 million.
And according to selling agents from Savills, the expressions of interest campaign has revealed there is still $300 million in capital waiting to secure prime retail assets in the region.
The sale price for Ormeau Village, which is anchored by a Coles supermarket, has been pitched at a tight passing yield of 5.3 per cent and was sold with a healthy weighted average lease expiry (WALE) of more than eight years.
The centre, located on Eggersdorf Road close to the M1, has been offloaded by Coles Group’s (ASX: COL) property development arm which built the centre in 2019 to service the fast-growing northern Gold Coast suburb.
The fully leased centre has a gross lettable area of 5,003sqm, with the Coles supermarket and Liquorland occupying 3,416sqm, alongside 16 specialty tenants.
Savills’ Peter Tyson and Jon Tyson, who negotiated the deal following an expressions of interest campaign, say the property was hotly contested.
“Ormeau Village transacted after attracting significant domestic and offshore buyer enquiry and bids from eight separate buyer groups,” says Peter Tyson, Savills’ national director of retail investments.
“Bidders in the process included institutional and private investors as well as syndicate funds and totalled around $300 million in unsatisfied capital still seeking a quality neighbourhood retail asset, preferred for its resilient qualities underwritten by daily-needs and essential service businesses.”
Savills says the prospective buyers were attracted to Ormeau Village due to the high quality of the development and the attractive WALE.
Jon Tyson says the long WALE is underwritten by ‘a rare net lease to Coles for a new 10-year term’.
“(This) included potential benefits from forecast supermarket sales growth within a reasonable timeframe coupled with strong catchment fundamentals of affluent young family households in a high growth inter-city corridor between Brisbane and the Gold Coast,” he says.
According to a recent report by Colliers, the Gold Coast was one of Queensland’s strongest retail property markets in 2022 with total transactions of $675 million during the year accounting for about 25 per cent of the state’s total activity.
Among the major transactions was the $265 million sale of Homeworld Helensvale, just south of Ormeau, which was Queensland's highest transaction on record for a large format retail centre.
Get our daily business news
Sign up to our free email news updates.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support