Investment Industry News

Neighbourhood shopping centre in Metropolitan Melbourne for sale

The Woolworths anchored Watervale Shopping Centre in Metropolitan Melbourne is for sale by JLL and CBRE

Watervale Shopping Centre in Melbourne’s Taylors Hill is set to test investor demand in the hotly contested neighbourhood shopping centre market, following a year of record high transaction volumes in the market sector.

Watervale Shopping Centre is located 22km from the Melbourne CBD within the north-west growth corridor of metropolitan Melbourne. The centre provides a highly desirable offering, anchored by a 3,388m2 Woolworths supermarket, a strong medical and health precinct and is supported by 17 non-discretionary specialty stores.

The 5,286m2 centre occupies a highly strategic 18,700m2 parcel of land on Taylors Road, an east-west arterial roadway, making the centre and it’s 254 car spaces a convenience shopping destination for both commuters and local residents.

The centre, positioned in Melbourne’s north-western growth corridor, services a well-established and expansion trade area of 84,500 residents

In Australia, the heightened interest in the neighbourhood shopping centres segment saw transactions hit a record A$2.9 billion last year, up 47% on the five-year average, according to JLL data.

JLL’s Stuart Taylor, Tom Noonan and Sam Hatcher together with CBRE’s James Douglas have been appointed to run the public expression of interest campaign on behalf of a Melbourne private investor, who is being advised by former estate agent Mark Wizel of Advise Transact.

Stuart Taylor, Senior Director of Retail Investments at JLL said “We are anticipating significant interest in the asset, with a range of institutional and private capital sources converging on the neighbourhood sector, with limited availability of high-quality centres, particularly in metropolitan locations.”

James Douglas, Senior National Director at CBRE said “The asset provides a highly resilient tenancy mix, underpinned by a long-term lease to Woolworths, expiring in 2030 with two further 10-year options, a strong medical offering and in-built fixed annual specialty rental reviews, key investment considerations driving buyer interest in this sector.”

“While we have seen significant yield compression in this sub-sector in the past 24 months, pricing metrics for neighbourhood centres remain attractive relative to prime assets in the office or industrial markets,” Douglas continued.

“Suburban retail assets have typically been dominated by private investors because of the lower yields, but REITS, unlisted funds and offshore investors are now active buyers in this sub-sector. The primary reason is the defensive stability of these assets and investors’ appetite for capital preservation in an environment vulnerable to external shocks” Taylor concluded.

The centre is positioned in Melbourne’s north-western growth corridor, within Melton City Council, one of Australia’s fastest-growing municipalities projected to grow in excess of 365,000 residents by 2041.

Servicing a well-established and expansion trade area of 84,500 residents, boasting impressive robust annual growth of 2.9%, reflecting an increase of 38,800 persons between 2021 and 2036 to reach 123,300 persons.

The centre is expected to further benefit from the impressive retail expenditure within the trade area of $1.2 billion, which is forecast to grow by an exceptional 4.9% p.a. to reach 4.2 billion by 2036.

About the author

Shopping Centre News

Shopping Centre News (SCN) is in the ‘information business’, and is perceived as such by its readers. Daily industry news makes shoppingcentrenews.com.au a must-visit as part of the morning routine for those who want to keep right across the latest retail developments and events, while SCN's premium magazine is the leading publication for the shopping centre industry in Australia and New Zealand.

Known as the ‘industry bible’ SCN is printed five times a year with fascinating, in-depth features and important critical analysis written by known industry insiders as well as the popular ‘Guns’ reports, which ranks Australian shopping centre performances. Shopping Centre News is the only publication in the world that features centre statistics on Turnover, Turnover per square metre and Specialty Shop turnover per square metre for every major centre in Australia.

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