This article originally appeared in The Courier Mail.
A listed property fund managed by Real Asset Management has divested a convenience centre in Brisbane’s inner-southwest it bought five years ago for a 14 per cent premium.
A high-net-worth Sydney investor paid $11.46m for The Hub Westlake at 7 Penong St, which was part of the RAM Essential Services Property Fund (REP).
The fund purchased the property in 2018 for $10.075m. RAM executive director Matthew Strotton said the sale was “good momentum” for the Chris Herde REP portfolio.
“Despite an unpredictable economy and high interest rates, investors consistently seek exposure in assets that house non-discretionary retail and healthcare,” he said.
Anchored by SPAR, the convenience centre is also tenanted by a dental surgery, a GP clinic, a pharmacy, a coffee shop, a swimming school, and a swimming pool equipment retailer.
It has a 1665sq m building area and it is on a 4848sq m corner site. The centre sold with an 8.3-year WALE and it realised a 6 per cent yield.
Mr Strotton said they had moved to a more active “capital recycling” stance, preparing
to move on growth opportunities as they emerge.
“In addition to the sale of The Hub, we are in advanced stages of diligence for the divestment of two more portfolio assets at a combined book value of $20m,” he said.
Colliers’ Harry Dever, who struck the deal, said that metro convenience retail centres underpinned by long
WALE and national covenants remained highly sought-after by local and interstate private investors.
“Neighbourhood shopping centre transactions are down 52 per cent in comparison to last year, with the most resilient capital being offshore groups and private investors unaffected by the high interest rate environment, which was highlighted in this campaign at Westlake,” he said.
“Investors show a particular preference for assets with long-term leases and income growth potential through rental reversion and fixed rental reviews. Inner-city neighbourhood and convenience centres in ear the CBD are highly sought-after.”