The acquisitive SCA Property Group has closed another Queensland deal, snapping up the Drayton Central Shopping Centre in Toowoomba for $34.34million.
The off-market transaction was negotiated by Peter Tyson and Jon Tyson of Savills Australia on behalf of the private local owner and has set a new benchmark yield for the neighbourhood asset class in regional Queensland of 5.39%, surpassing previous records.
Located in Drayton, an outer southern suburb of Toowoomba, the Woolworths anchored centre was built in 2014 by the local Hughes family.
Savills’ National Director Peter Tyson commented “the centre was a perfect fit for ASX listed SCA Property Group’s investment philosophy of investing in high-quality low-risk convenience based neighbourhood retail centres.”
Mr Tyson described Drayton Central as a “defensive retail asset comprising a strongly trading full line Woolworths Supermarket which is fully leased featuring only 11 specialty tenancies including medical, dental, pharmacy and other daily-needs based traders”.
“This asset class has proven to be resilient due to its exposure to non-discretionary retail tenants and strong weighting to food sales through grocery-based anchors. In this case, Woolworths secured around sixty percent of the income.”
“The market has been reminded of this resilience through the unfolding pandemic and there is heightened investor demand for retail centres. Convenience based neighbourhood centres anchored by Coles or Woolworths in the sub $40 million price point are becoming more scarce in the market at the same time as they are in more demand” Jon Tyson said.
The Drayton Central transaction is SCA’s third Queensland acquisition in 2021 totalling over $97million, with other deals brokered by Savills including the Coles and Kmart anchored Mt Isa Village for $44.2million and the Woolworths Cooloola Cove shopping centre for $18.66million.
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