A Woolworths based Neighbourhood Centre in Sydney’s Schofields has sold for $37.5m, reflecting a sharp 3.75% yield.
The Schofields Shopping Centre at 217 Railway Terrace is located in one of Sydney’s fastest growing areas. The Centre is positioned opposite the Schofields East metropolitan Train Station and is 50 km north-west of Sydney CBD.
The 4,473sqm Centre was opened in 2014 and in addition to the Woolworths full-line supermarket, the Centre also contains a BWS, a pharmacy, and pad site kiosks across an 11,840sqm site.
Colliers James Wilson and Harry Bui sold the property on behalf of Singapore-based Firmus Capital with contracts exchanged in mid November and settled 4 weeks later.
“A competitive ‘off-market’ negotiation resulted in strong interest from local and offshore investors who were attracted to the convenient centre’s high percentage of income secured by a high performing Woolworths Shopping Centre, combined with its strategic location in the rapidly growing North West Sydney growth corridor,”.
Mr Wilson said, the sale result “recorded the sharpest neighbourhood shopping centre investment yield in 2021, setting a benchmark return of 3.75%.”
“The $37.5 million price point attracted a wide range of both local and overseas investor mandates, especially given the long-term development upside afforded by the Sydney metropolitan site,” Mr Bui said.
“It was the high net-worth investor’s first shopping centre acquisition, highlighting the new wave of private capital from Vietnam and South East Asia countries which Colliers are engaging with to acquire essential service retail investments.”
In 2021, Colliers recorded $2.5 billion in neighbourhood shopping centre transactions, which was an increase of 58 per cent on the previous year. The average cap rate compressed 74 basis points over the same period as an increasing number of private and institutional investor mandates target essential service investments anchored by supermarkets.
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