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Woolworths divests Perth’s Banksia Grove for $27 million

Banksia Grove sales campaign attracted a strong interest

Woolworths has divested its self-anchored Banskia Grove shopping centre in Perth’s north eastern growth hub for $27.28 million to an offshore private investor. With a net lettable area of 5,721m2, the centre features a nine-year WALE and is currently underpinned by 11 specialty tenants, including Terry White Chemist, Plus Fitness and The Coffee Club.

Woolworths will continue to occupy 3,850m2 on a 12-year lease with 10 additional five-year options, effectively allowing the lease to run until 2081.

Following a five-week international Expressions of Interest campaign, the complex sold to a private Singapore-based investor for $4,768 per m2 on a passing yield of 5.96%.

Anthony Del Borrello and Richard Cash of CBRE’s Western Australian Retail Investments team negotiated the sale of the newly constructed neighbourhood shopping centre with the team fielding over 90 enquiries and seven offers.

Woolworths divests Banksia Grove for $27m

Del Borrello commented that this transaction demonstrated continued demand from offshore investors interested in well-positioned, quality retail assets anchored by strong national tenants, noting they had been particularly active in the Perth retail space over the past 12 months.

“In this time, over $70 million worth of retail assets have transacted, including Kelmscott Plaza at $19 million and Coles Vasse, which sold for $19.6 million – both properties were acquired by private Asia-based investors,” Del Borrello said.

“Investors based in South East Asia are drawn to Western Australia due to its geographical proximity and shared time zone, with many of the high-net-worth individuals’ children opting to study in Perth, making it a logical, convenient location to invest in property” he continued.

Cash added that with investors looking to capitalise on the state’s increasing economic stability and attractive investment returns, confidence in the Perth retail market was steady.

“Non-discretionary and service based neighbourhood shopping centres continue to be in high demand due to the insulation from economic fluctuations and impact of online retail sales,” Cash said.

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