Melton Station Square Shopping Centre has transacted via an off-market deal for $43 million representing a 4.83% fully leased yield further demonstrating the strong demand and yield compression that is occurring in the neighbourhood shopping centre sector.
Justin Dowers and Kevin Tong of Stonebridge Property Group acting on behalf of a private family, transacted the property off-market to a syndicate of locally based Asian investors. Located in the major western growth corridor of Melton, 37 kms west of Melbourne’s CBD, the 1.39ha site is anchored by a Coles, Liquorland and 12 specialty retail shops.
“The investor sentiment for neighbourhood shopping centres remains very strong and for good reason. The centres are performing better than they ever have and represent a very low risk investment option”, Dowers said.
The sale continues the trend of tightening yields amongst retail investments. “Based on our recent experience with the sale of Melton Station Square and Woolworths Greenvale Lakes, our view is that yields for neighbourhood shopping centres have compressed in excess of 100 basis points in the past 12-18 months.”
Dowers added “Buyers are attracted to the longevity of supermarket tenants. Supermarkets very rarely leave their premises which is a contrast to other property sectors where there is more risk”.
Stonebridge Asia Practice Director Kevin Tong added, “The acquisition from a syndicate of local Asian investors is a sign of the continued demand and interest from this buyer pool. While new international capital may have slowed we are still witnessing a strong depth of interest for locally based Asian groups many of whom have been investing in the country for several years.”
The sale of Melton Station Square Shopping Centre continues the trend of successful campaigns for the Stonebridge Property Group who have also recently just transacted the Woolworths Greenvale Lakes Shopping Centre for a 3.95% yield.
This year has seen strong sales in the Victorian supermarket based shopping centre sector including the sales of Torquay Village Shopping Centre for $40 million and Armstrong Creek Shopping Centre for $55.6 million.