A local private investor has scooped one of the last retail investment opportunities within the premier Village Square Brown Plains retailing precinct for $9.725 million.
CBRE’s Michael Hedger and Nick Willis negotiated the transaction of 5 – 9 Eastern Road on behalf of Engage Capital, with the sale price reflecting a yield of 8.6%. The property comprises a 3,154sqm freehold retail investment, anchored by the successful Go Health Clubs and supported by Rivers and Glamaco Superstore.
He commented: “This sale is testament to the popularity and reputation of Village Square Browns Plains, with investors drawn to the centre’s diverse retail mix which is home to over 25 national tenants that spans over 56,000sqm.” Located approximately 22km south of Brisbane’s CBD, Village Square Browns Plains is a successful retail precinct developed by AVEO (formerly FKP).
The centre was also the recipient of the Town Planning Urban Design Excellence Award from the local council. Mr Hedger said the sale came after a flurry of transaction activity at the popular retail precinct, with CBRE brokering more than $40 million in re-sales at Village Square Browns Plains over the past 18 months. “The high volume of sales at the centre is further evidence of its established reputation as a premier retail precinct in Brisbane’s south.” Mr Hedger said the transaction also signaled strengthening conditions in the retail property market.
“This project shows the strength within the retail investment market, with sales between $1million and $10 million hotly contested by private and self-managed super fund investors,” Mr Hedger said. “Yields have continued to compress over the past 12 months and there are signs that it will continue to do so while the cash rate remains low and banks proactively looking to lend. Private investors continue to favour retail investments due to their depreciation benefits, secure income stream, fixed annual growth and national covenants.”
Over the past two years, CBRE has transacted a total of $80 million in retail investment sales at the precinct including the Large Format section to Harvey Norman for approximately $20 million and the high street retailing precinct to Engage Capital for $27 million in 2013. These larger transactions in the precinct were transacted by Craig O’Donnell and Peter Rossi. Mr O’Donnell said that these had turned out to be astute investments considering the rate the market has strengthened over the past 18 months, in particular the spending growth of 10% plus per annum, which is now being enjoyed by the household goods sector.