Troon Group’s Ballarat Lifestyle Centre has sold for $12.39 million in a strong signal that investor confidence has returned to the retail investment market. The centre sold to a Melbourne-based private investor reflecting a yield of 5.98%, following a highly competitive expressions of interest campaign.
Located on a large 11,710 m2 site at 29 Cherry Flat Road, Delacombe, the property comprises a fully leased 3,765m2 (GLA) centre with 175 car spaces, returning an annual net income of $740,490 from five separate tenancies, including The Salvation Army, Autobarn, RB Sellars and Beds R Us.
The Centre was developed by the well-known developer Troon Group, whom have been prominent in the precinct, having successfully developed the Delacombe Town Centre (DTC) and adjoining Bunnings Warehouse.
Stonebridge Property Group’s Justin Dowers, Kevin Tong and Philip Gartland in conjunction with Colliers International’s Mike Crittenden, Tim McIntosh and James Wilson negotiated the sale.
Dowers said the result is a clear indication that confidence has returned in regional growth locations and that the lack of supply is putting pressure on pricing.
“In a market where the supply of investment stock has been at its lowest levels, coupled with cheap cost of debt, we have seen a spike in demand for securely leased investments, even those without an anchor tenant. The lack of anchor tenant at the Centre and the regional location simply did not perturb the market. Local and interstate investors are on the hunt for yield and are recognising the relative strength and attractiveness of Regional Victoria”, said Dowers
Crittenden said the COVID-19 restrictions experienced across Victoria in 2020, highlighted the strong performance of the LFR sector, which drove aggressive purchaser activity, resulting in a benchmark result.
“With Victoria experiencing the countries harshest lockdowns in 2020, consumers were forced to stay home which intern saw an uptick in DIY projects around the home, with this increase in spending occurring at LFR Centres. The ‘Pandemic Proof’ nature of these centers has driven greater demand from investors in securing this retail asset class”, he said.
Tong said there is no sign of the supply shortage improving in the short term.
“Sale campaigns in the second half of 2020 were extremely competitive, with pricing reaching new peaks and buyers reducing or eliminating conditions. We are excited to see what lies ahead for premium retail assets in 2021 – the retail investment landscape is certainly changing quickly”, he concluded.
