ISPT’s Retail Australia Property Trust (IRAPT) has divested Katoomba Village Shopping Centre in the Blue Mountains for $34.8 million.
CBRE’s James Douglas, James Sherley and JLL’s David Mahood, Seb Fahey and Sam Hatcher managed the sale process with the price reflecting an initial yield of 6.36%.
The 5,400sqm centre is anchored by a full-line, recently refurbished Coles supermarket, which underpins approximately 84% of gross income on a long-term lease until 2033, with options until 2073.
The heavily contested EOI process generated over 200 direct enquiries from private investors and syndicators. Seven formal offers were received with investors attracted to the strong supermarket performance, and secure lease arrangement, potential rental growth upside in the short term and unique protection from rising holding costs.
CBRE’s James Douglas said, “Food, service and convenience retail which has long shown its value resilience and reliable cashflows are highly sought after at present with the yield to cost of debt spread offering a compelling investment opportunity in some instances, which was the case with Katoomba Village.”
Complementing the strong-performing Coles supermarket, Katoomba Village features two kiosks and five specialty shops including Liquorland, a pharmacy, as well as food and service retailers all serviced by 352 car spaces.
JLL’s David Mahood said, “Demand for neighbourhood centres remains strong, with Katoomba Village being NSW’s seventh such transaction in 2025. With Sydney retail assets tightly held, investors are targeting regional supermarkets for their stability and growth potential. Meanwhile, high construction costs have limited new supply, seeing demand quickly outpace supply.”
CBRE’s James Sherley added, “NSW remains the preferred investment destination for domestic capital in Australia with year-to-date transaction volumes surpassing $1.65 billion, representing close to 50% of transaction activity across the country.”
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