A private investor has outlaid $54.05 million for Sapphire Marketplace on the NSW south coast as interest in sub-regional shopping centres continues to surge. The transaction was struck on a 6.50% capitalisation rate.
The prominent 17,310m2 Bega centre comprises 15,327m2 of retail and 1,983m2 of office space. It is securely anchored by a rare triple major tenant profile including a Woolworths supermarket, Dan Murphy’s and the only full-line Big W discount department store within 200km, providing an attractive major tenant WALE of 8.4 years.
CBRE’s James Douglas negotiated the sale of the Bega property on behalf of Woolworths Group.
Douglas noted, “The public sale process for Sapphire Marketplace drew strong interest from institutional and private capital sources. There is no shortage of demand for quality sub-regional assets, given the current yield spread relative to neighbourhood shopping centres.”
“Given the tight pricing being achieved for neighbourhood centres, we have seen astute investors tailor and adapt their investment strategies to target high-quality sub-regional shopping centres, which feature a strong major tenant profile and a sustainable number of specialty retailers with a focus on non-discretionary spending,” Douglas said.
“Sapphire Marketplace’s three strongly performing major tenants and 22 specialty shops aligns with this market investment shift.”
Sapphire Marketplace is the focal point of the Bega Town Centre – and the only sub-regional shopping centre within the surrounding trade area, with the closest sub-regional shopping centre located in Batemans Bay, circa 145km north.
The well-established main trade area population of 39,630 residents’ benefits from significant annual tourism within the Bega Valley Shire, with spending estimated at $424 million in 2019 and accommodating approximately 2.48 million visitor nights – equivalent to 20% of the resident market or 6,803 additional permanent residents.
The centre is expected to benefit from a strong MTA retail spending capacity of $647.1 million, projected to increase to $990.0 million by 2036, with food retail and food catering expenditure growth of 3.0% and 3.5% per annum respectively, according to LocationIQ.