Dexus takes shopping mall sales to $285m with Woy Woy divestment
Dexus has divested its third sub-regional shopping centre in less than three months after selling the Coles and Kmart-anchored Deepwater Plaza in Woy Woy on the NSW Central Coast to a local investment group for $112 million.
The sale on a yield of around 6.5 per cent takes the total value of mall divestments from the $15 billion Dexus Wholesale Property Fund to $285.1 million after it sold the Shepparton Marketplace for $88.1 million to Singapore-listed Metro Holdings in October on a 6.25 per cent yield and the Beenleigh Marketplace in Brisbane to investor and developer Mintus for $85 million earlier this month on a yield of about 6.75 per cent.
The Dexus fund did unsuccessfully market the Beenleigh centre with a $100 million price tag three years ago but even so, the successful divestment of all three malls highlights the strong investor appetite that remains for sub-regional centres and their smaller cousin, neighbourhood malls.
The former are typically anchored by a supermarket and discount department store and the latter by a supermarket. Both typically have a high proportion of essential services retailers, a category that showed its resilience during the pandemic, and which is also less vulnerable to the growth of online shopping.
In addition, many sub-regional and neighbourhood malls have become last-mile delivery hubs via click-and-collect and car boot services.
Like Dexus, development and investment giant Lendlease has also had success divesting a portfolio of four sub-regional malls valued at more than $600 million.
Earlier in December it finalised the $280 million sale of Caneland Central Shopping Centre at Mackay in Queensland to Warren Ebert-led syndicator Sentinel.
This followed Lendlease exchanging contracts for the sale of Menai Marketplace in Sydney and Southlands Boulevarde in WA to funds managed by ASX-listed HMC Capital for $242.5 million in total.
Another asset, the Settlement City mall in NSW is being circled by a local super fund manager.
In another sub-regional mall deal, Telstra Super sold its half stake in Sydney’s Carlingford Court shopping centre in September to Hong Kong-based property investor JY Group for $120.5 million on a yield of 6.3 per cent.
Situated in the heart of the Woy Woy town centre, Deepwater Plaza offers more than 15,000 square metres of retail space, making it one of the largest sub-regional malls on the Central Coast.
Alongside its Coles and Kmart anchors, other tenants include Best & Less, Service NSW and more than 45 speciality stores.
Lendlease acquired the mall in July 2014 for $98.5 million when it bought it off hotel mogul Jerry Schwartz. At the time Dexus acquired it on a capitalisation rate – akin to an investment yield – of 7.25 per cent.
CBRE’s Simon Rooney handled the sale of all three Dexus malls, but declined to comment.
In another non-discretionary mall sale, this time at the smaller end of the market, Ganellen Asset Management has purchased Marketplace Deagon, a 6005-square-metre neighbourhood centre in Brisbane’s outer northern suburbs for $20 million on a yield of more than 6 per cent.
The sale was $3.3 million less than what the supermarket-anchored mall last changed hands for in 2017, when it was purchased by Melbourne investor James Zhang.
“The asset has been managed remotely by the previous owners, and it’s our hands-on management style that will bring the asset back to its former potential,” said Richard Manning, managing director at Ganellen Asset Management.
