Focus on neighbourhood shopping centres

Melbourne-based MAB Funds Management has moved to take advantage of strong institutional and private-sector interest in non-discretionary retail assets and put a neighbourhood shopping centre on the market.

The 7963-square-metre Mornington Village centre in Main Street is anchored by a Woolworths supermarket and contains a full-line Aldi store, Reject Shop and 15 specialty shops. The site has 55 undercover and 455 open-air car spaces.

A number of neighbourhood shopping centres have sold over the past year but most, about 86 per cent, changed hands as part of a portfolio and were not offered as individual sales, selling agent CBRE's Mark Wizel said. He said the Mornington Village centre could sell for $25 million-plus.

Heightened demand from private and institutional investors for neighbourhood shopping centres was driving MAB Fund's decision to divest, general manager Nick Gray said.

Investor interest in the sector has grown, with research showing neighbourhood centres have bucked this year's trend towards weaker overall retail growth.

Urbis' Retail Averages 2013 report found that, Australia-wide, medium-size suburban shopping centres focusing on food, convenience and everyday shopping grew 3.4 per cent over the year, outperforming their major suburban cousins, whose turnover expanded by 1.4 per cent.

Declines in department store turnover held back the performance of major shopping centres, the report found.

Sales of sub-regional shopping centres have also been strong nationally and are expected to surpass last year's total of $983 million transactions, according to Jones Lang LaSalle.

The Bendigo Marketplace shopping centre is on the market and could sell for more than $160 million.

JLL's head of retail investments, Simon Rooney, said a growing pool of investors was targeting the sub-regional asset class.

He said the Marketplace's location as the only sub-regional centre in central Bendigo and its development potential with six adjoining assets included in the offer was likely to result in it being "competitively pursued by institutional investors".

The centre includes a Big W, Woolworths, Dick Smith and Best & Less.