A fully leased retail centre in Arana Hills was purchased by a private investor for $5.5 million on a 7 per cent yield.
The centre is located on a prominent 2,576sqm site at 4 Patricks Road. It features 1,077sqm NLA and is occupied by seven tenants some of which include: Commonwealth Bank, Westpac, QML and Snap Fitness that generate an approximate annual net income of $385,206.
Hunter Higgins and Stewart Gilchrist of Colliers International marketed the property via an Expression of Interest campaign. Commercial buyers agent Damien Holliday of Prosper Group assisted the buyer in the search for a suitable investment and represented them in the transaction.
“This property provided good fundamentals with great exposure, abundant car parking facilities, is positioned opposite a neighbourhood shopping centre, and has diversified income across seven tenants, several of which are national operators,” Mr Holliday said.
“The five week campaign brought close to 80 enquiries which came down to seven registered offers from a mix of international and national purchasers,” Mr Higgins said.
“Prior to commencing the campaign, we worked closely with the vendor to renegotiate leases and significantly improve WALE, which reflected positively in the end price.
“Before going to market our recommendation was also to refurbish the façade and ensure the centre was presented in the best possible condition for sale. The quality investment also presents some value add with annual income from an onsite digital signage opportunity.
“Investors are finding it very hard to locate quality retail stock sub $7 million, and this pent up demand is having a positive influence on the yields for vendors. The level of yield compression is really dependent on the stock quality.
“We are also noticing buyers from the south targeting South East Queensland, as yields in Sydney and Melbourne are becoming increasingly sharp,” Mr Higgins said.