Woolworths anchored The Village Dandenong Shopping Centre in Melbourne’s south-east has sold for $29.1 million to a Chinese private investor, reflecting an initial yield of 5.19%. The off-market transaction was brokered by JLL’s Stuart Taylor and Ming Xuan Li on behalf of Perth based RG Property Group.
Located approximately 35km south east of Melbourne CBD, Dandenong forms part of Melbourne’s thriving south eastern growth corridor and is one of Victoria’s largest economic hubs and fastest growing regions.
The Village Dandenong is a convenience-based neighbourhood shopping centre, anchored by a full-line Woolworths Supermarket and BWS Liquor store, supported by 15 specialty retail tenancies.
Rhett Williams, CEO of RG Property said: “The sale price reflects an excellent outcome for our investors. The completion of the transaction builds upon our track record of identifying value opportunities and executing on those strategies.”
The Melbourne’s centre sold for $29.1 million, reflecting an initial yield of 5.19%.
The transaction represents the fifth Victorian neighbourhood shopping centre sale to be completed in 2020 (three of which have been sold by JLL), totalling $118.93 million and an average weighted initial yield of 5.47%.
Commenting on the sale, JLL’s Stuart Taylor said: “The strong pricing achieved in this off-market transaction confirms the robust demand for non-discretionary retail assets. The neighbourhood shopping centre market has demonstrated liquidity in the first half of 2020, with pricing remaining firm. Transactions have been driven by the defensive nature of the income streams and the continued ability to access cheap debt.”
Sold by JLL the neighbourhood centre attracted strong interest.
Taylor added “These assets are being viewed as an investment ‘safe-haven’ in the current climate given they derive the majority of their income from essential service businesses such as Woolworths and Coles supermarkets.
“Supermarkets outperformed during the peak of the pandemic in March, with monthly retail trade growth of over 23.0%. Despite the ABS preliminary retail trade figures for April falling by 17.9%, food retailing figures remained higher than in April 2019”, he said.
”Even with the proven strong demand for these assets, vendors are still favouring the off-market method of divestment in the current climate”, Taylor said.
