Sentinel Sells Dubbo Retail Centre

Sentinel Property Group have managed to complete the sale of a small Neighbourhood Centre in Dubbo to a private investor for $20.2 million.

The Riverdale Shopping Centre in Macquarie Street, Dubbo comprises a Woolworths Supermarket, 15 specialities and a Reading Cinemas totally 6,156sqm. Woolworths recently entered into a new 5 year lease. The districts surrounding Dubbo are continuing to feel the devastating affects of drought which has hampered the performance of the Centre in recent years.

The property generates a net income of approx $1,443,000 pa and sold on a yield of 7.26%. The purchase price represents $3,276/sqm of NLA.

Sentinel Countrywide Retail Trust acquired the Centre from Charter Hall in October, 2014, for $14 million.

The property was originally offered to the market in via JLL in April 2019, but failed to sell. The final transaction was completed by Savills.

There have been 24 shopping Centres in regional areas that have sold since the start of 2019. The weighted average cap rate of these sales has been 6.9% with the majority of purchasers being smaller privates and syndicators.

Whilst the recent Coronavirus outbreak may not reach the regional towns, the financial impacts are still likely to be felt as the economy moves into a recession. Under the circumstances however a 7.26% yield may well be seen to be attractive as the economy shrinks backwards.