NEWS

Sydney Metropolitan Neighbourhood Shopping Centre sale breaks national record

High performing Sydney-metro Neighbourhood Centre with residential development potential re-rates the neighbourhood shopping centre sector nationally.

Chester Square Shopping Centre in Sydney’s South-West has sold for $68.5 million with a yield of 3.78%, breaking the national record result for the sharpest Neighbourhood Shopping Centre yield. 

The highly sought-after Neighbourhood Shopping Centre, sold by Colliers International, generated over 200 enquiries from domestic and offshore investors, with six parties offering below a 4.25% return. 

A local private investor provided more attractive terms to overcome a strong mix of competing domestic and offshore investors.“The benchmark result, and extremely competitive nature of the Chester Square Shopping Centre campaign, highlights the market depth for prime freehold Sydney metropolitan retail opportunities, said James Wilson, NSW Director, Retail Investment Services at Colliers International.

“The result was 192 basis points sharper than the most recent Sydney metropolitan freehold neighbourhood shopping centre transaction, being Chipping Norton Market Plaza that sold for $30.5 million in July this year. 

The premium can be attributed to the underlying retail performance of the neighbourhood centre, large 1.7-hectare island site within close proximity to Chester Hill railway station and the attraction of a mixed-use development which provides convenient public transport to major employment the hubs of Liverpool, Sydney and Parramatta CBD.”

Chester Hill

The benchmark result, and extremely competitive nature of the Chester Square Shopping Centre campaign, highlights the market depth for prime freehold Sydney metropolitan retail opportunities, said James Wilson, NSW Director, Retail Investment Services at Colliers International.

“The result was 192 basis points sharper than the most recent Sydney metropolitan freehold neighbourhood shopping centre transaction, being Chipping Norton Market Plaza that sold for $30.5 million in July this year. The premium can be attributed to the underlying retail performance of the neighbourhood centre, large 1.7-hectare island site within close proximity to Chester Hill railway station and the attraction of a mixed-use development which provides convenient public transport to major employment the hubs of Liverpool, Sydney and Parramatta CBD.”

The Chester Square Shopping Centre site offers an exciting opportunity to not only expand the retail but to develop a residential apartment block above the site without impacting the trade of the high-performing Woolworths that is currently paying percentage rent. Investors were attracted to the 1.7-hectare sites mixed-use development potential, given the favourable zoning allowed for over 41,000sqm of GFA to be built within 200 metres of a railway station.

“With the opportunity to capitalise on a diversified income and secure cashflow generated from a mix of strong-performing national retailers and well-established local tenants, whilst progressing with a mixed-use development application for the future retail expansion and potential construction of high density apartment residences above, Chester Square Shopping Centre is a strategic development site for astute investors,” said Harry Bui, National Director of Metro Sales, Investment Services at Colliers International.

“Once the Centre’s mixed-use potential is unlocked, future residents will be afforded convenient access to employment hubs and will be serviced by the retail offering below.”

Located at 1 Leicester Street, Chester Square Shopping is in the heart of the bustling Chester Hill retail precinct and is the dominant offering within the area, servicing the convenience needs local residents and a large population of workers in surrounding suburbs.

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