The Mirvac owned Cherrybrook Village, in Sydney’s affluent north west, is set to sell for circa $133m, providing Mirvac with a whopping 40% premium to their last valuation.
The 9,382sqm neighbourhood shopping centre is positioned on 3.0ha site and anchored by a high-performing Woolworths and a highly regarded long-standing green grocer, Martelli’s plus 51 fresh food and service-based tenants and 441 car parks. The Centre ha a very loyal tenant and customer base with more than 60% of the retailers having had tenure for 15 or more years.
According to the sale documents, the Centre generates a fully leased net income of $6,662,462 per annum, providing the purchaser with a fully let yield of 5%.
Whilst the Centre has a weighted average lease expiry of under 4 years, Woolworths are expected to exercise an option to renew the lease for a further term due to the strong performance of the store.
The Centre, in Shepherds Drive, was built in 1989 and last expanded in 2004. In 2016, Mirvac had hoped to obtain Council approval to add a second storey and reconfigure it to make room for an Aldi supermarket, a gym, more parking and a medical centre. The Sydney North Joint Regional Planning Panel approved the application in 2017, however Mirvac scrapped the plans in favour of a more modest refurbishment of the forecourt and car park which was completed in 2018.
Sam McVay from McVay Real Estate and Carl Molony from Stonebridge Property Group managed the sale process on Mirvac’s behalf. The purchaser is undisclosed, though contracts have been exchanged.
Mirvac’s last external valuation of the Centre was by Urbis in June 2020. At the time Urbis adopted a capitalisation rate of 6.0% and determined a valuation of $93m. Despite the compression in cap rates and the plans to sell the Centre, Mirvac did not update the valuation in December half yearly results.
The centre has an established trade area of 74,280, with household incomes 27% above the Sydney Metro average generating 35% higher Centre sales productivity than the single supermarket benchmark.
The sale of Cherrybrook Village follows a string of recent sales of Neighbourhood Centres including Casey Central Shopping Centre which sold to Haben Property Group for $225m on a 5.4% yield and Victoria Point, QLD which was acquired by HomeCo for $160m on a 4.8% yield, and Hallet Cove in SA which sold to Antunes Group for $71m.
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