Buyers shopping for centres

Private investors are continuing to dominate neighbourhood shopping centre sales, with Hogans Corner, Hoppers Crossing, sold this week for $25.55 million.

The centre, on the corner of Hogans and Derrimut roads, has a Woolworths supermarket, nine shops and a Dan Murphy's liquor outlet.

It was transacted between two private investors on an initial yield of 7.37 per cent, said CBRE.

Agents say private buyers have been emboldened by falling interest rates as the spread between yields and debt becomes more attractive.

Shopping centre tenants were also more comfortable about expanding their businesses which was boosting the confidence of owners and buyers, they suggest.

There is a strong feeling retail tenants have stabilised their businesses, said CBRE's Mark Wizel who, along with Justin Dowers, negotiated the Hogan's Corner deal.

"The Victorian retail investment market has witnessed consistent transactions at sharper yields than interstate benchmarks," Mr Wizel said.

One other neighbourhood centre has been sold this year, the development-ready Summerhill, at 850 Plenty Road, Reservoir. It was brought by private investor Les Smith for $19 million.

Several sub-regional centres have changed hands including Centro's Cranbourne and Karingal shopping centres, of which a 50 per cent interest was sold as part of portfolio to ISPT. The sale follows a similar trend last year when most neighbourhood centres were sold to private interests, Colliers retail investment services executive Tom Noonan said.

"Private investors bought everything last year bar one [Rosebud Central Shopping Centre, which was purchased by the local council]," he said.

"Last year, a number of sales didn't proceed because of pricing. This year we'll start to see some yield comprehension," he said.

At least five other neighbourhood or sub-regional centres are for sale.

Lend Lease is selling Pakenham Place for an undisclosed price and asking about $400 million for its Greensborough Plaza centre.

A private investor is selling Station Square Shopping Centre, in Melton South, for about $10 million and another is offering the Bacchus Marsh centre for about $30 million.

As well, MAB Corporation has put its University Hill, Bundoora development up for sale for about $40 million.

Hogans Corner was sold by private company Nobleplace Pty Ltd, a property title search reveals. The identity of the buyer, another private investor, has not been disclosed.

Property sale prices

Hogans Corner Shopping Centre (right) $25,550,000

Keilor Downs Plaza $67,000,000

Shepparton CBD retail portfolio $24,500,000

Bunnings Echuca $8,550,000

Bunnings Bairnsdale $8,207,000

Torquay Central Shopping Centre $14,000,000

850 Plenty Rd, Reservoir $18,700,000

Total Value $166,507,000

SOURCE: CBRE