Yield slashed as investor picks up Sydney shopping centre for $37.5m

Local shopping centres anchored by supermarkets traded consistently throughout the pandemic, and have never been in higher investor demand.

26/01/2022 4:45:00 AM

Local shopping centres anchored by supermarkets traded consistently throughout the pandemic, and have never been in higher investor demand.

Local shopping centres anchored by supermarkets traded consistently throughout the pandemic, and have never been in higher investor demand.

ShareStiff competition from a deep cohort of high net investors looking for an income producing asset with development potential have pushed the price of a Sydney neighbourhood shopping centre to $37.5 million.The winning bidder paid a record-low yield of 3.75 per cent for the 1.2-hectare Woolworths-anchored property opposite Schofields Station in the heart of Sydney’s north-west growth corridor.

A high net worth investor paid $37.5 million for this shopping centre in Schofields, Sydney.Colliers agent James Wilson, who sold the asset for Singapore-based Firmus Capital with colleague Harry Bui, said the yield was lower than recent benchmark sales such as

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to save article Share Stiff competition from a deep cohort of high net investors looking for an income producing asset with development potential have pushed the price of a Sydney neighbourhood shopping centre to $37.5 million. The winning bidder paid a record-low yield of 3.75 per cent for the 1.2-hectare Woolworths-anchored property opposite Schofields Station in the heart of Sydney’s north-west growth corridor. A high net worth investor paid $37.5 million for this shopping centre in Schofields, Sydney. Colliers agent James Wilson, who sold the asset for Singapore-based Firmus Capital with colleague Harry Bui, said the yield was lower than recent benchmark sales such as Woolworths Bulli, which sold last October for $36 million on a return of 4 per cent . Research from JLL, which brokered the Bulli transaction, estimated yields for neighbourhood centre sales above $20 million, had averaged just below 6 per cent in the past two years. Last week the on a relatively high yield of 6.6 per cent, partly because of some shorter-term leases. Advertisement Mr Wilson said one or two centres outside NSW may have traded at a lower yield in the past year, but as he understood it, those were development opportunities rather than well-leased income producing assets. He said the pricing and potential of the 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,” Mr Wilson said. “Investment companies were interested but probably priced out by privates that weren’t bound by the same kind of structured gains and requirements.” Mr Wilson said the location was a major attraction and a big reason for the tight yield. “The view is that this asset offered opportunities that others didn’t,” he said. Advertisement “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 growth out in Schofield is immense, and that’s the reason why Coles have opened a shopping centre next door.” is a property reporter based in Sydney covering all aspects of commercial and residential real estate including major deals, market trends and developments. Email