Arana Hills Retail Centre A Good Buy Amidst Limited Stock

A fully leased retail centre in Arana Hills was purchased by a private investor for $5.5 million on a 7 per cent yield.

The centre is located on a prominent 2,576 square metre site at 4 Patricks Road. It features 1,077 square metre NLA and is occupied by seven tenants some of which include Commonwealth Bank, Westpac, QML and Snap Fitness that generate an approximate annual net income of $385,206.

The Arana Hills purchase also adds some extra value added to annual income due to the existence of an onsite digital signage opportunity.

Hunter Higgins and Stewart Gilchrist of Colliers International marketed the property via an Expression of Interest campaign. Commercial buyers agent Damien Holliday of Prosper Group assisted the buyer in the search for a suitable investment and represented them in the transaction.

“The five week campaign brought close to 80 enquiries which came down to seven registered offers from a mix of international and national purchasers,” Mr Higgins said.

“Prior to commencing the campaign, we worked closely with the vendor to renegotiate leases and significantly improve WALE, which reflected positively in the end price."Mr Holliday said the property provided good fundamentals with great exposure, abundant car parking facilities, is positioned opposite a neighbourhood shopping centre, and has diversified income across seven tenants, several of which are national operators.

During the sales process, it was noticed that buyers from Australia's south were targeting potential purchases and investment opportunities in South East Queensland, as yields in Sydney and Melbourne are becoming increasingly sharp.

“Investors are finding it very hard to locate quality retail stock sub $7 million, and this pent up demand is having a positive influence on the yields for vendors. The level of yield compression is really dependent on the stock quality," Mr Higgins said.