GPT’s Highpoint Homemaker Centre has been listed for sale in a move tipped to generate strong interest from local and offshore investors. The Maribyrnong centre has been trading for nearly 30 years and is the dominant furniture, bedding and homewares centre in Melbourne’s inner north-west.
Anchored by Spotlight, together with 18 large format retail operators, it the biggest large format retail centre to be offered to the Victorian market in some time. The complex is fully leased, providing a net income of approximately $5 million per annum.
The single level, 21,272m2 centre is located 8 km north-west of the Melbourne CBD and is opposite Highpoint Shopping Centre, one of largest and best performing shopping centres in Australia.
The homemaker centre occupies a large Commercial 1 zoned site and forms part of the Highpoint Activity Centre, which designates a preferred height limit of six to 10 levels, providing medium to long term flexibility for any future owner.
The sale coincides with increased investor demand for large format retail assets as new tenants, particularly non-traditional large format retailers, expand their presence.
The CBRE Victorian Retail Investments team of Mark Wizel and Justin Dowers, together with Carl Molony and Lincoln Blackledge of Stonebridge, have been jointly appointed to sell the asset on behalf of The GPT Group and GPT Wholesale Shopping Centre Fund via a public Expressions of Interest campaign.
Wizel said a low interest rate environment coupled with the attractiveness of large format retail yields relative to other retail assets had further underpinned buyer interest.
“The sector has also shown a level of resilience to the impact of online retailing, with demand and spending at large format centres supported by population growth and high levels of residential construction in markets such as Victoria,” Wizel noted.
The listing of Highpoint Homemaker Centre follows a strong first half for retail transaction activity, with close to $1,500,000 in Victorian assets changing hands.
“There has seen a continued flight to quality, with secondary assets being discounted due to fewer buyers yet more choice,” Wizel noted.
“Core assets and centres with development upside continue to be highly sought after, as they provide either income security or flexibility for an owner to build through the cycle. Highpoint Homemaker Centre provides both security and long term redevelopment potential, which will appeal to a wide buyer pool.”
Maribyrnong is recognised as the premium destination for large format retail in the inner north west of Melbourne, attracting consistent interest from national retailers across all categories, including furniture, homewares, pets, baby supplies, automotive and leisure.
“With a high level of retail sites being repurposed for residential uses, retailers are competing for sites, which is in turn driving stronger commercial terms for landlords,” Molony said.
The primary trade area is currently 134,972 persons and forecast to increase 39% to 187,235 by 2030. Additionally, the spending capacity in the primary trade area is anticipated to increase by 3.9% per annum throughout the same period. The median house price in Maribyrnong has reached $997,000, which reflects a strong increase of 48.1% over the past five years.
“When there is a pipeline of strong population growth in a catchment area over a ten to 20-year period, assets like Highpoint Homemaker Centre become very risk averse, given any fluctuations in the economy are generally outweighed by demand associated with a significant influx of residents,” Molony said.
He noted that the Victorian economy had also been performing strongly, with a key driver being the acceleration in the state’s population, which had contributed to the improvement in the retail horizon. Consumer confidence currently sits at 119.5, above the long-term average of 112.9.
“The strong economic performance of Victoria coupled with the record low cash rate of 1.5% and improved consumer spending conditions coming into 2018, means investment demand for core retail investment assets will continue to be robust,” Molony noted.
Highpoint Homemaker Centre will be offered by Expressions of Interest closing 25 October, 2018.
