Region Group is looking to divest three Woolworths-anchored, convenience and essential service-based retail properties across Australia’s East Coast.
The three assets, located in Victoria and New South Wales, consist of Wyndham Vale Square in Metropolitan Melbourne’s western suburbs; Drouin Central in Melbourne’s outer east; and Leura Shopping Centre located within the popular Blue Mountains suburb of Leura, just 1.5 hours from the Sydney CBD.
All three assets offer long-term leases to Woolworths, supported by complementary speciality tenant uses, and extremely defensive income profiles. Each of the assets offers strong underlying land values in highly strategic retail locations. The freehold interests will be offered to market individually later this month via Expressions-of-Interest.
JLL’s Sam Hatcher, Nick Willis, Stuart Taylor, Tom Noonan, and David Mahood have been exclusively appointed to handle the divestments.
“With all of the assets anchored by Woolworths and the vast majority of income derived from non-discretionary and essential services, we continue to see very strong demand for this retail sub-sector due to the highly defensive and secure nature of the income streams. Neighbourhood shopping centres such as these are often referred to as ‘recession-proof’,” said Sam Hatcher, Head of Retail Investments (Australia).
Leura Shopping Centre (NSW). Photo by Mark Merton Photography
Senior Director of Retail Investments, Stuart Taylor said: “This offering represents a significant opportunity for shopping centre investors, amid extremely low supply of quality assets being presented to market. Transaction volumes of neighbourhood centres across Australia are down approximately 72% YTD on 2022, and 80% on the record high volumes seen in 2021, a trend primarily attributable to near zero supply of purchasing opportunities.”
JLL’s Director of Retail Investments Tom Noonan added: “We expect these properties to generate an enormous amount of interest from predominantly private investors which dominate the hotly contested sub-$30m price bracket.”
“The three assets present as a rare opportunity, being the first time in over two years that investors can secure a sub-$30m Woolworths anchored neighbourhood centre in either Melbourne or Sydney.”
Hatcher concluded, “We expect these offerings to be strongly contested, given their attractive investment fundamentals and the opportunity they provide purchasers to acquire best in class retail, at a very attractive price point.”
