Rosebud $135m Sale Reaffirms Investor Retail Appetite

A sub-regional shopping centre on Victoria’s Mornington Peninsula has changed hands for $134.5 million, one of the first substantial retail transactions for the year.

Sold in the off-market deal was the Rosebud Plaza, anchored by Woolworths, Coles, Kmart and Dan Murphy’s, at Rosebud, about 90km south of Melbourne’s CBD.

The identity of the buyer, a private investor based in Sydney, has not been disclosed.

Now-former owners Charter Hall last year undertook a substantial refurbishment to “further develop a sense of belonging, brand vision and enhance the retail offering for the community”.

In December, the centre launched a fresh look for Woolworths, which relocated to within the plaza; refurbished amenities, mall and “ambience upgrades”, and changes to the north-western carpark.

As well, a new Dan Murphy’s and BCF showroom opened.

The transaction was handled by Nick Willis and Sam Hatcher from JLL Retail Investments Australia & New Zealand.

The deal reaffirmed investor demand for the retail sector, according to JLL.

Nick Willis who brokered the off-market transaction said the underlying fundamentals of shopping centres had continued to improve, led by strong population growth and a lack of new floor space supply.

“This, coupled with the relative returns available compared to other sectors, is attracting a growing weight of capital both domestically and globally,” he said.

▲ A new-look Woolworths was launched in the centre in December.

“While unlisted managers have been one of the most active buyers of shopping centres in 2023, the fourth quarter had a significant increase in activity from private investors.

“In December alone almost $700 million of shopping centres transacted to private investors.”

Hatcher said the sub-region sector was undergoing a splitting between core and non-core assets.

“During the 12 months to December, 2023, the initial yield spread reflected across national transactions ranges from 5.5 per cent to 7.75 per cent,” he said.

“In this higher interest rate environment, we have seen the managers who are reliant on distributions shift their focus to more regionally located assets in search for this spread.

“The formal on-market supply pipeline for shopping centres above $100 million was subdued throughout 2023, however, we anticipate this to significantly increase in 2024 and vendors take advantage of the investor demand.”