Laurimar neighbourhood centre with Woolworths sells for $27m
The Laurimar Shopping Centre in Melbourne’s northern suburbs has been snapped up by a local investor for $27 million on a yield of 6.1 per cent.
Selling agents JLL said it was the first sale of a neighbourhood shopping centre in Victoria this year and highlighted a continued trend of yield compressions for the popular asset class.
The Woolworths-anchored centre in Doreen, 37 kilometres north of the Melbourne city centre, last sold for $19 million in October 2012 on a net yield of 7.85 per cent.
Selling agent Stuart Taylor, of JLL, who also negotiated the sale of the centre in 2012, said yields had compressed significantly over the past 18 months with median yields for neighbourhood centres tightening by 200 basis points since mid-2010.
“This transaction and the lack of acquisition opportunities suggests that yields could continue to tighten,” Mr Taylor said.
JLL recorded $224 million of neighbourhood shopping centre transactions nationally in the first half of 2016, down 77 per cent from the same period last year.
“Melbourne is in the middle of a neighbourhood shopping centre supply shortage. Even with a number of expected shopping centre completions in 2018, average annual supply through to 2020 will be below the long term average of 27,600 square metres per annum,” said Annabel McFarlane, JLL director of strategic research.
The 4707-square metre centre was completed in 2010 and forms part of the Laurimar Delfin Lendlease residential estate. Apart from a full-line Woolworths supermarket, it has 10 speciality stores and a kiosk. It sold off-market.
“Investors continue to be attracted to this asset class, given the majority of the income is driven by food and grocery-based retailers, which is considered to be a highly stable sector of the market and underpins the security of the asset’s income,” Mr Taylor said.
