Kallo Town Centre will test the market for a product that has become an investor favourite based on recession-proof, non-discretionary tenancy profiles and long leases to blue-chip tenants.
The brand new neighbourhood shopping centre is anchored by a 12-year lease to Woolworths and is supported by 19 specialty tenancies, medical/pharmacy, gym and a childcare centre pad site. The centre is due for completion in April 2023.
Kallo Town Centre is strategically positioned in the northern growth corridor of Melbourne, 30 km from the CBD within the fast-growing municipality of the City of Hume. The Centre occupies a prominent site of 21,524m2 in the heart of the Kalkallo master-planned community.
Stonebridge Property Group are acting on behalf of the developer, Oreana Group.
Oreana Group’s Director of Property, Paul Bourchier said: “The development of this key town centre site in Kalkallo underlines Oreana’s commitment to the delivery of quality local convenience based projects in Melbourne’s growth corridor and will strengthen our substantial development portfolio, consisting of a range of residential communities, Activity centres, convenience and childcare projects serving those communities”
According to Stonebridge National Partner, Justin Dowers, who is marketing the property with Kevin Tong, Kallo Town Centre represents the first substantial neighbourhood shopping centre to be offered for sale in Victoria since June last year, highlighting the tightly held nature of the asset sector.
“Neighbourhood shopping centres have increasingly become a popular asset class which is drawing significant investment from REITs, unlisted funds, and syndicators. This is due to their strong performance during the pandemic and interest surrounding the ‘convenience’ nature of the investments, which is a term now commonly used when referring to Neighbourhood Shopping Centres.”
“Traditionally in Victoria, neighbourhood shopping centre acquisitions were dominated by private capital. Between 2016 and 2018 private Asian investors acquired 43% of the neighbourhood shopping centres in Victoria.”
“In 2021, the acquirers of this asset class are significantly more diverse increasing the levels of competition for the assets and driving compression in yields.”
Kallo Shopping Centre will be the only neighbourhood shopping centre within its catchment area, which is anticipated to grow at a rate of 13.6% per annum over the next decade.
“Kallo Town Centre is a ‘first-mover’ within the catchment which is very important in establishing the retail hierarchy. Customer’s habits become quite set and are difficult to change, which will hold this centre in good stead in the medium-long term”
“Given the growth rate of the catchment area and lack of retail accommodation, this centre is expected to trade exceptionally well from the opening day”
Stonebridge Asia Practice Partner Kevin Tong added: “With the recent opening of international borders and the return of students, we have seen the level of enquiry from the Asian buyer profile continue to grow. Kallo Town Centre will tick the boxes for a lot of international investors especially given that it will be brand new (minimal CAPEX required) and will have a long lease in a major growth corridor in Melbourne.”
