Dexus Offloads Central Coast Retail Centre for $111m

A private investor has paid $111 million for a Central Coast retail centre as interest in sub-regional assets continues to run hot.

Deepwater Plaza in Woy Woy, about 80km north of Sydney sold off market on a core capitalisation rate of 6.50 per cent in the sale negotiated by CBRE head of retail capital markets—Pacific Simon Rooney.

The Deepwater deal was undertaken on behalf of a Dexus managed fund and follows disposals of Shepparton Marketplace ($88.1 million) and Beenleigh Marketplace ($85 million) in 2022, also negotiated off-market by CBRE, completing $284.1 million in disposals.

Deepwater Plaza is a convenience focused sub-regional shopping complex of 17,417sq m anchored by a Coles supermarket and Kmart discount department store with combined MAT of $84.1m, and providing a major tenant WALE of 5.6 years (by GLA).

▲ More than $700 million had been transacted in the regional retail sub-sector year to date, according to CBRE.

The major tenants are supported by a variety of national and chain retailers, which represent approximately 90 per cent of the centre’s tenanted GLA and 85 per cent of the gross rental income.

“This transaction demonstrates the shift in investor focus and renewed demand for sub-regional centres, specifically for assets with a clear focus on non-discretionary spending and genuine value-add opportunities,” Rooney said.

He said more than $700 million had been transacted in this sub-sector year to date.

“Investors were attracted by Deepwater Plaza’s robust major tenant and overall sales performance, coupled with the centre’s strong specialty productivity of $10,007 per square metre and sustainable occupancy cost of 11.5 per cent.”

The centre is on a 42,910sqm freehold site next to Woy Woy railway station and “benefits from a favourable planning scheme offering immediate and longer-term value-add opportunities via targeted specialty re-leasing and mixed-use development avenues”, according to Rooney said.