Marquette achieve 5.5% on St Lucia Neighbourhood Centre28 January 2020
Marquette Properties have sold the St Lucia Neighbourhood Convenience Centre for $15m setting a new record yield for an IGA-anchored shopping centre in Queensland.
The centre is located approximately 4km south-west of the Brisbane CBD, in one of Brisbanes top 10 most affluent suburbs. It consists of a newly refurbished supermarket anchored by 15 year lease to IGA, together with 7 ground floor retail specialty tenants and 5 first floor office suites for a total area of 1,960sqm. The Centre generates approx $830,541 in net income and has a weighted average lease expiry of 6.17yrs.
The centre sits on a 3,033sqm site with prominent frontage to Hawken Drive providing good access to the 13,500 local residents and the 61,600 student and staff at The University of Queensland less then 500m away.
Marquette acquired the property in 2016 for $10.2m and secured the extended commitment of IGA, during due diligence. The supermarket operator also agreed to a complete store refurbishment over their 1,094sqm tenancy. Marquette also spent $470,000 undertaking a cosmetic upgrade to the Centre as part of a re-positioning.
“Marquette is all about buying assets, making them better, and on-selling demonstrably different properties to what we bought,” said Marquette Properties Managing Director Toby Lewis.
The purchaser, MRL Investments is a privately owned Australian investment company for the Mineral Resources Lihir Pty Ltd group, which is the Trustee Manager of the Australian assets of the Future Fund for the people of the Lihir Group of Islands, New Island Province, PNG. MRL possess an extensive portfolio of assets, including 488 Queen Street and 316 Adelaide Street Brisbane.
The Centre was sold via an on market process by CBRE which attracted 134 enquiries and 11 serious offers from local, interstate and offshore investors that were all within 15% of the final price.
CBRE's Joe Tynan said “The level of enquiry and bidding was above average for this category of shopping centre, primarily due to its prime location and solid investment fundamentals,”
“We are continuing to see significant yield compression for neighbourhood shopping centres that offer security through a tenancy profile of non-discretionary retailers.
“This was evidenced in our recent transactions of Woolworths Ormeau and Woolworths Logan Village, which both achieved yields under 6%.”