Woolworths sells Bomaderry neighbourhood mall for $40m
Supermarket giant Woolworths has tapped the resurgence of interest in small neighbourhood malls focused on non-discretionary shopping needs, selling a property it had developed at Bomaderry on the NSW South Coast to a private investor for $40 million.
The deal was struck on a 5.43 per cent investment yield, a slightly tighter return than recent deals in the small malls sector, which have been sold on yields around 5.5 per cent. It was the sharpest yield paid for a neighbourhood shopping centre in NSW so far this year.
It’s only the third non-metro neighbourhood shopping centre to be sold in NSW in 2023, with deal activity in the shopping mall sector being sparse throughout the year due to a mismatch in seller and buyer expectations.
The other non-metro neighbourhood shopping centres in NSW that sold this year were Bathurst Chase and Parkes Arbour, which had yields of 7.6 per cent and around 10 per cent.
On the buy side for the Bomaderry sale is an undisclosed Victorian private investor. Colliers’ James Wilson and Ben Wilkinson brokered the sale.
“Groups are realising that the defensive nature of the neighbourhood shopping centre sector mean they continue to trade well given the strong demand for essential services under these economic conditions and this transaction is a reflection of this,” Mr Wilson said.
The centre was constructed in 2020 by Fabcot, the development arm of Woolworths Group. The 5451-square-metre property includes a Woolworths, a gym, medical centre, pharmacy and four other specialty tenants. Its fully leased net income is $2,171,058 per annum.
It is the latest in a run of divestments by Coles and its rival Woolworths, which often deploy their own balance sheets to develop and then sell retail real estate.
The sale will mark another breakthrough for the shopping centres sector in which there have been fewer deals, following the sale of Perth’s Midland Gate and Stockland Townsville that both occurred in the past fortnight.
Before these transactions, there were only five shopping centre transactions in the three months to August, a tally which was over 60 per cent lower compared to a year earlier, according to real estate research agency PAR Group.
This was despite over 400,000 square metres of retail space being available for sale, PAR Group said.
