Brisbane-based Engage Capital, in partnership with Evans Long, has sold its Calliope Centre Shopping Centre in regional north Queensland in a fund through development deal valued at $18 million.
CBRE’s Michael Hedger and Nick Willis negotiated the sale of the neighbourhood centre to a private investor.
Situated 20km south-west of Gladstone, the 2,193sqm Dawson Highway centre is anchored by a 1,562sqm Supa IGA supermarket and 12 specialty stores.
“Calliope Central is the only centre within the main trade area, which is forecast to show extremely strong population growth of over 7% per annum,” Mr Hedger said.
“While regional locations such as Calliope have been affected by the slowing mining economy, centres with strong fundamentals and limited competition present attractive yet secure investments.”
The off market transaction was structured on a fund through development basis, with anchor tenant IGA set to undergo a significant expansion to become a full line, 2,422sqm supermarket on a brand new 20 year lease to Drakes Supa IGA.
The expansion will also incorporate an additional 697sqm of specialty retail space.
While the centre has a current net income of approximately $900,000, the redevelopment is projected to deliver a fully leased net income of $1,540,000 on completion - representing an equivalent yield of circa 8.5 per cent.
Mr Willis said the sale highlighted the growing investor interest in regionally based shopping centres.
“As yields continue to compress for neighbourhood centres in metropolitan locations, we are experiencing a growing interest in regional assets and development opportunities. Investors are continuing to move up the risk curve in the pursuit for more attractive returns,” he said.