The Urban Developer
AdvertiseEventsWebinarsUrbanity
Industry Excellence
Urban Leader
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Urban Leader Awards Logos RGB White
NOMINATIONS CLOSE SEPTEMBER 12 RECOGNISING THE INDIVIDUALS BEHIND THE PROJECTS
NOMINATIONS CLOSING SEPTEMBER 12 URBAN LEADER AWARDS
LEARN MOREDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
print
Print
OtherStaff WriterSun 14 Feb 16

Spate Of Transactions Signals Bumper Year For VIC Retail Market

1

Victoria’s retail investment market continues to gain momentum, with CBRE handling more than $700 million worth of property transactions in 2015, and a spate of deals in the pipeline already helping shape a strong start to 2016.

A tranche of transactions towards the end of 2015 helped cap one of the best years on record for Melbourne’s freestanding retail investment market, with $132 million in assets changing hands over the period of August to December 2015.

In evidence of the trend, CBRE’s Retail Investment team, comprising Mark Wizel, Justin Dowers, Rorey James and Joseph Du Rieu, recently negotiated the sale of Chemist Warehouse in Cranbourne North to a Victorian based investment group for $3.4 million, reflecting a yield of 4.9%.

The next property to test the market will be the upcoming auction of Mitre 10 in Sorrento on March 5.

Located in the heart of Sorrento, on Ocean Beach Road, the 2,601sqm landholding is anticipated to receive strong interest from both investors and developers looking to utilise the site’s full potential by 2020, when the existing lease expires.

Mr James said a shift in investment sentiment had underpinned a surge in sales activity over the past three months.

“In the latter half of 2015 and the start of 2016, what has been evident is the flight to quality from investors, who are happy to pay sharper yields to secure single tenanted, freestanding retail investments,” Mr James said.

“The sale of Chemist Warehouse, Cranbourne North reflected a tight passing yield of 4.9% - a sign of the current buyer markets’ relentless appetite to secure these sought after investments. Furthermore, this appetite is reinforced by the low interest rate environment, with it encouraging buyers to pay some of the sharpest yields seen in over a decade.”

Mr Du Rieu said the strong result follows a flurry of record retail investment transactions across Victoria, including the Seaford IGA Supermarket for $4.55 million and Harvey Norman Bendigo for $9.375 million.

“Off the back of what was one of the strongest years for Melbourne’s commercial property market, offshore, interstate and local investors are seeking out opportunities to gain a footprint in this ever strengthening market, which offers some of the best fundamentals in the country,” Mr Du Rieu explained.

“As the market strengthens and stabilises, investors are increasingly looking out of the city core for opportunities, with retail investments across the metropolitan area, being one area experiencing significant growth.”

Other transactions recently completed include the 7-Eleven in Alphington for $5.5 million, Hungry Jacks in Mill Park for $6.2 million and the McDonald’s in North Geelong for $3.05 million.

Mr Dowers said auctions had also emerged a key transaction tool more widely used in the market.

“With a deeper pool of local and offshore investors than ever for freestanding retail investments, auctions are able to encourage bidding and drive competitive tension, which together with being the preference for an offshore buyer, has been a consistent method of sale for breaking new records in this market,” Mr Dowers added.

 

RetailAustraliaReal EstateSector
AUTHOR
Staff Writer
"TheUrbanDeveloper.com is committed to delivering the latest news, reviews, opinions and insights into the best of urban development from Australia and around the world. "
More articles by this author
ADVERTISEMENT
TOP STORIES
Stockland bumps up its apartment pipeline in melbourne and sydney
Exclusive

Stockland Re-Enters Density in $5bn Apartment Play

Renee McKeown
4 Min
Woolloongabba Precinct Vulture St
Exclusive

Brisbane Developer in Cross River Rail Compensation Tussle

Clare Burnett
4 Min
The Mondrian Gold Coast hotel's food and beverage is driving profits
Exclusive

Touch, Taste, Theatre: What’s Driving Mondrian’s Success

Renee McKeown
6 Min
Fortis’ display suites are designed as brand environments first, with tactile details and curated design to build buyer confidence before project specifics.
Exclusive

Relevant or Redundant: Will Tech Kill Display Suites?

Vanessa Croll
7 Min
Exclusive

Missing Heart: Why The Gold Coast Needs a CBD

Phil Bartsch
7 Min
View All >
Aerial view of Caboolture and Bruce highway to Brisbane with Bribie Island Road crossing, Queensland, Australia
Policy

Queensland’s $2bn Push Opens New Housing Front

Vanessa Croll
JQZ Parramatta EDM
Residential

JQZ Plots 10-Storey Addition to Parramatta ‘Auto Alley’ Plans

Clare Burnett
The Adelaide purpose built student accommodation market is about to increase by 1058 beds with the State Commission Assessment Panel supporting two towers in the making.
Student Housing

Highrise Approvals Add 1000-Plus PBSA Beds in Adelaide

Renee McKeown
The two towers, of 35 and 34 storeys, help cement the SA capital’s growing status as the best place in Australia for the…
LATEST
Aerial view of Caboolture and Bruce highway to Brisbane with Bribie Island Road crossing, Queensland, Australia
Policy

Queensland’s $2bn Push Opens New Housing Front

Vanessa Croll
2 Min
JQZ Parramatta EDM
Residential

JQZ Plots 10-Storey Addition to Parramatta ‘Auto Alley’ Plans

Clare Burnett
3 Min
The Adelaide purpose built student accommodation market is about to increase by 1058 beds with the State Commission Assessment Panel supporting two towers in the making.
Student Housing

Highrise Approvals Add 1000-Plus PBSA Beds in Adelaide

Renee McKeown
3 Min
Stockland bumps up its apartment pipeline in melbourne and sydney
Exclusive

Stockland Re-Enters Density in $5bn Apartment Play

Renee McKeown
4 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/spate-transactions-signals-bumper-year-vic-retail-market