$37.5 million for the 1.2-hectare shopping centre, on a return of 3.75 per cent. According to Colliers agent James Wilson, who sold the property to Singapore-based Firmus Capital together with his colleague, the yield was lower that the recent benchmark sales, including the 4 per cent return on Woolworths Bulli, which sold for $36 million in October last year.
Research conducted by JLL, the firm which brokered the Bulli transaction, showed that for neighbourhood centre sales above $20 million, the estimated yields had averaged just below 6 per cent over the past couple of years. Although Meadow Heights Shopping Centre, located in Melbourne’s outer north was traded for $22 million on a relatively high return of 6.6 per cent last week, this was partly a result of some shorter-term leases.
According to Wilson, considering several factors, Schofields centre was in the “sweet spot” for wealthy individuals. “Given the price point of below $40 million and the limited number of speciality shops attached to it as well, and minimal management, it really appealed to that high net worth private market,” he said. “Investment companies were interested but probably priced out by privates that weren’t bound by the same kind of structured gains and requirements.”
He added that the location was a big reason for the tight yield, since it offered a host of opportunities which other assets didn’t. “It’s a very modern, Woolies-anchored neighbourhood shopping centre with minimum capex requirements that sits on a strategic block of land directly opposite a railway station in one of the fastest developing precincts in Sydney,” the Colliers agent said. “The growth out in Schofield is immense, and that’s the reason why Coles have opened a shopping centre next door.”
