A 50% interest in one of Melbourne’s largest sub-regional landholdings has sold for $66 million to Aware Real Estate with Altis Property Partners as manager for the transaction.
Sunshine Marketplace, 50% owned and managed by Vicinity, is situated 12 km from Melbourne CBD in the burgeoning suburb of Sunshine, which is classified as one of nine Melbourne Major Activity Centres. The property is located on a substantial 12.2 ha landholding and has an approved development plan for an additional 190,578m2 of mixed-use floor space.
Anchored by Woolworths, Big W and Village Cinemas, Sunshine Marketplace boasts a lettable area of approximately 34,000m2 and is 99% occupied. The asset is further supported by JB Hi Fi, Priceline, McDonalds and some 60 specialties and kiosks, four pad sites and three office suites.
JLL’s Nick Willis and Sam Hatcher sold Sunshine Marketplace via an on-market EOI process on behalf of Challenger and their client, a signal of the depth of investor appetite for retail assets situated on large landholdings with development upside.
Willis said, “This transaction provides evidence to the growing trend of superfunds re-entering the retail sector, however this time through direct ownership stakes. This ownership structure, provides an increased control and flexibility to execute on the large-scale development opportunities these assets provide.”
Sunshine Marketplace is located in Melbourne’s strongest population growth corridor, forecast to grow at 2.5% per annum until 2036
Aware Super’s maiden investment into the retail sector, handled by property manager Altis Property Partners, comes as Super Funds invest over $2.0 billion into retail properties over the 24-months ending December 2022.
Hatcher said, “Traditional retail owners who use leverage to bolster overall returns to their investors have faced challenges in the rising interest rate environment. There is an increased appetite from the likes of super funds, and capital with strong balance sheets, as they can often outperform on lower yielding assets in the current environment, gaining access to opportunities that otherwise would not be available”.
Retail investment in Melbourne sank to significantly low levels in 2022 as assets continued to be held tightly. Transactions in 2022 were down 40% on 2021, and 55% below the 10-year average.
Willis said, “The rarity of the opportunity amplified interest from investors, as Sunshine Marketplace is the largest sub-regional landholding in Melbourne to be formally marketed and sold since 2010. This resulted in a highly competitive EOI process resulting in 190 unique enquiries and 10-formal bids from a mix of traditional retail owners, maiden capital, and local property developers.”
The asset is at the epicentre of investment and connectivity with the State and Federal governments committing more than $120 billion to Western Melbourne, delivering projects such as the Suburban Rail Loop and Melbourne Airport Rail – Melbourne’s first airport rail service travelling directly through Sunshine.
Hatcher adds, “Sunshine Marketplace benefits from its strategic location just 400 metres from Sunshine Train Station. The area is Melbourne’s strongest population growth corridor, forecast to grow at 2.5% per annum until 2036. The demographic fundamentals provide a strong investment case for the long-term development options for the site, which is already approved for an ELP expansion and 84 turn-key service apartment complex, in addition to a DA lodged for a 10-storey, 13,000m2 lettable area office building (STCA).”
