SCA Property builds on retail strategy with $34.3m Toowoomba deal

SCA Property builds on retail strategy with $34.3m Toowoomba deal

SCA Property Group (ASX: SCP) has added Toowoomba's Drayton Central Shopping Centre to its expanding portfolio of regional assets in a deal worth $34.34 million.

The acquisition has been struck on a yield of 5.39 per cent, which sets a new benchmark low for the neighbourhood assets class in regional Queensland.

The Drayton Central centre, built in 2014 by Toowoomba's Hughes family, was sold in an off-market deal negotiated by Savills Australia to SCA - a listed real estate investment trust with a strong asset base comprising low-risk non-discretionary retail centres across Australia.

"This asset class has proven to be resilient due to its exposure to non-discretionary retail tenants and strong weighting to food sales through grocery-based anchors," Savills national director Peter Tyson said.

"In this case, Woolworths secured around 60 percent of the income."

Savills says the pandemic has highlighted the resilience of neigbourhood centres which has led to a heightening of investor demand.

"Convenience-based neighbourhood centres anchored by Coles or Woolworths in the sub-$40 million price point are becoming scarce in the market, at the same time as they are in more demand," says Savills' Jon Tyson, who negotiated the sale with colleague Peter Tyson.

The Drayton Central deal brings SCA's buying spree in Queensland this calendar year to $97 million with the state now representing a third of the group's retail assets.

It also comes on the heels of the $44.2 million acquisition of Mt Isa Village, anchored by Coles and Kmart, and the $18.66 million deal for the Woolworths Cooloola Cove shopping centre south of Hervey Bay. Both deals were secured this year.

Earlier this year, SCA also snared Marketown in Newcastle from AMP Capital Investors for $150.5 million, on an initial passing yield of 5.6 per cent.

Despite the lockdowns of 2020, the SCA group posted a net profit after tax of $102.9 million in the FY21 December half. This was up 14.1 percent from a year earlier due to an increase in the fair value of investment properties.

Never miss a news update, subscribe here. Follow us on LinkedIn, Instagram and Twitter.

Business News Australia

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

Facing the latest impacts of cyber-crime: cyber insurance premiums increase for businesses
Partner Content
As Australian businesses are forced to adapt to a new normal yet again, a different typ...
Aon
Advertisement

Related Stories

SCA Property rocking the suburbs with profit recovery

SCA Property rocking the suburbs with profit recovery

SCA Property Group's (ASX: SCP) convenience shopping centre-f...

SCA Property on the hunt for more bargains

SCA Property on the hunt for more bargains

The coronavirus may have eaten a hole in its revenue, but conveni...

SCA Property profits fall as specialty retailers struggle to pay rent

SCA Property profits fall as specialty retailers struggle to pay rent

Supermarkets have benefited from consumers flooding small suburb...

New valuations lift SCA Property profits 130%

New valuations lift SCA Property profits 130%

SCA Property Group (ASX: SCP) is starting to reap the benefits o...