The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
JUST 15 DAYS UNTIL OUR FLAGSHIP CONFERENCE JOIN MORE THAN 550 ALREADY ATTENDING
JUST 15 DAYS TO GO UNTIL URBANITY-25 550+ ALREADY ATTENDING
REGISTER NOWDETAILS
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
Exclusive

Why Sentinel is Betting Big on Olympic City Office Sector

Phil Bartsch
5 Min
The Port of Brisbane has released its Vision 2060 which details the need for inland rail connectivity
Infrastructure

Brisbane Port’s $15bn Future Faces One Big Obstacle

Renee McKeown
5 Min
Freecity Rouse Hill triple towers 2 Tempus Street
Exclusive

Freecity Takes Covers Off $330m Triple Towers in Sydney’s North-West

Leon Della Bosca
5 Min
Parallel Workshops Stockdale Housing PBSA project
Exclusive

Suburban Success Story Turns PBSA Thinking on its Head

Leon Della Bosca
7 Min
Exclusive

Interstate Developers Find Lots to Love in ‘Progressive, Affordable’ SA

Taryn Paris
5 Min
View All >
Cromwell 19 National Circuit Barton ACT rendering HERO
Office

Cromwell Lands Lease for Canberra Office Block Scheme

Leon Della Bosca
Landcom The Joinery Annandale a build to rent development on the former westconnex site
Build-to-Rent

Landcom Takes Cover Off BtR Plans at Annandale

Renee McKeown
A hydrogen production facility, part of the Hydrogen Energy Supply Chain (HESC) project to ship hydrogen from Victoria to Japan.
Exclusive

Minister Intervenes, Approves Hastings Hydrogen Facility

Marisa Wikramanayake
For not the first time, a planning minister has intervened in the project as Victoria pushes its renewable energy plans …
LATEST
Cromwell 19 National Circuit Barton ACT rendering HERO
Office

Cromwell Lands Lease for Canberra Office Block Scheme

Leon Della Bosca
3 Min
Landcom The Joinery Annandale a build to rent development on the former westconnex site
Build-to-Rent

Landcom Takes Cover Off BtR Plans at Annandale

Renee McKeown
3 Min
A hydrogen production facility, part of the Hydrogen Energy Supply Chain (HESC) project to ship hydrogen from Victoria to Japan.
Exclusive

Minister Intervenes, Approves Hastings Hydrogen Facility

Marisa Wikramanayake
3 Min
Windsor Lutwyche Road DA hero
Development

Arch-Filled Commercial Strip Filed for Brisbane’s Northside

Phil Bartsch
3 Min
View All >
ADVERTISEMENT
Article originally posted at: https://theurbandeveloper.com/articles/spate-transactions-signals-bumper-year-vic-retail-market