In a year seeing reduced transaction volumes across retail investments, Mirvac has divested its Canberra-located neighbourhood centre to Region Group – its first acquisition since Centuria’s neighbourhood portfolio in 2022.
The Cooleman Court transaction was exclusively handled by Nick Willis and Sam Hatcher from JLL Retail Investments Australia & New Zealand.
Cooleman Court, a dual-supermarket neighbourhood centre anchored by Woolworths and ALDI, sees more than $100 million in supermarket sales annually and is ranked 12th in Shopping Centre News 2023 Mini Guns for productivity (MAT/m2).
Region Group CEO, Anthony Mellowes said: “Despite a quieter period for acquisitions, our ambition to grow our portfolio remains true. Our shopping centres form an essential part of daily life for many Australians, and Cooleman Court has widened our reach for the first time in the Canberra community.
“Anchored by Woolworths and ALDI supermarkets, and located in a projected population growth area, Cooleman Court is a quality asset to add to our portfolio of convenience-based shopping centres,” said Mellowes.
Cooleman Court is a top performing Mini Gun centre
This transaction comes as the tenth neighbourhood centre nationally and the second largest retail transaction in ACT since 2017.
JLL’s Head of Retail Investments, Sam Hatcher who brokered the off-market transaction said “Demand for dominant core neighbourhood centres is attracting significant capital, the interest is driven by resilient income streams and long-term capital growth potential. The demand is further heightened by rising construction and debt costs, outpacing the severely limited on-market supply.
“Investors are seeking defensive assets in an environment where the macro-outlook continues to be revised regularly. The long-term stability of neighbourhood shopping centres and strength of major tenant covenant is drawing private and institutional capital into the sector now that pricing has adjusted to higher return expectations.
The Cooleman Court transaction was exclusively handled by Nick Willis and Sam Hatcher from JLL
“The feasibility hurdle for delivering new development stock is very high, and that supply shortage, combined with strong population growth, underpins the outlook for rental growth, even more so than in any other retail sub-sector. We believe rents for existing assets will continue to grow, and major tenants (ie, supermarkets) are becoming more competitive to secure the right location given the lack of new asset creation,” said Hatcher.
Nick Willis adds, “It is this supply and demand imbalance that is driving a significant resurgence from capital back towards the sector. In addition to the consistent participation from local capital, we are now seeing the re-emergence of major offshore capital sources who are seeing value in the sector along with security in the diversified nature of the cashflow, underpinned by these factors.”
