Market Insights

10.12.2018

Shanghai buyer’s $44.5m for Coles Aurora

A Chinese investor introduced through CBRE’s Shanghai office has pipped several local and international rivals in paying $44.5 million on a circa 5.6 per cent yield for Coles Group’s Aurora Village neighbourhood centre at Epping in Melbourne’s north.

CBRE National Director Investments, Mark Wizel, who brokered the deal with Justin Dowers, Kevin Tong and Lewis Tong, said the purchase by a first time shopping centre buyer followed last month’s sale of Burwood One for $181.5 million, also to a first time buyer.

“This is the second result in a row to first time Chinese retail buyers adding further to confirmation of the 2018 trend away from pure development sites to income producing assets with the potential to add value through future development .

“This is a marked shift in sentiment which may well underpin expectations of a solid retail investment market in 2019 following what has been an exceptional 2018.

“The connection between CBRE’s Shangahi and Melbourne offices has been critical to these transactions in both understanding the buyer’s thinking and delivering a measure of confidence in what the Melbourne market is capable of delivering over time,’’ Mr Wizel said.

According to data compiled by CBRE Director Institutional Retail Investments, Trent Weir, shopping centre sales in Victoria have topped $1.75 billion so far in 2018, up a massive 84 per cent over 2017.

Sub-regional centre sales have been the standout with a total sales figure of $491.5 million, more than three times the $114 million recorded in 2017. Neighbourhood centres were up 62% to $284.5 million while Regional centre sales hit $984 million, up nearly 50% on last year’s $660 million.

Despite Chinese Government restrictions on capital outflows Chinese investors have remained a prominent player in Victoria’s shopping centre market outlaying more than $327 million, including the purchases of Aurora, Burwood One, Mornington Village ($39.38m), Highlands SC ($43m) and Maroondah Village ($18.8m).

Mr Dowers said the recently-completed Aurora neighbourhood centre offered investors a double supermarket anchor with both Coles (15yr lease) and Aldi (10yrs) tenancies contributing to a return of more than $2.5 million per annum.

The two supermarkets comprise 73 per cent of the centre’s 8284 square metre NLA, which also includes 16 specialty stores and a Coles Express Service Station (10 years).

The 23,265 square metre, Town Centre zoned, property comprises two titles including the 21,880 square metre shopping centre site, and the 1385 square metre Coles Express site.

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