JLL sells 100% interest in Coffs Harbour Shopping Centre for $83.3 million

A 100% interest in Toormina Gardens Shopping Centre sold to Fort Street Real Estate Capital Fund III, on behalf of Vicinity Centres (50%) and Challenger (50%).

January 30, 2018

JLL has exclusively negotiated the sale of a 100% interest in Toormina Gardens Shopping Centre for $83.3 million to Fort Street Real Estate Capital Fund III on a fully leased yield of 7%. 

JLL's Head of Retail Investments – Australasia, Simon Rooney exclusively handled the transaction and said, "The sale of Toormina Gardens is yet another example of the continuing trend of REITs selling down smaller assets to reinvest capital into either new opportunities or opportunities within their existing portfolio. We expect REITs generally to continue to adjust their portfolio to reduce risk and efficiently redeploy capital.

"Small sub-regional shopping centres which are largely food, service, and convenience-based remain highly sought after. Yields for these assets are attractive relative to core, stabilized, assets which are trading at record low yields. Transactions of sub-regional centres dropped to $1.0 billion in 2017, less than half the $2.4 billion (per annum) which sold between 2013 and 2016 - given the volume and scale of portfolio sales in prior years.

"Unlisted funds are driving acquisitions in the retail sector at present and are by far the dominant buyer group, accounting for 34% of all transactions in 2017. Unlisted funds have acquired over $4.1 billion of sub-regional assets since the surge in activity began in 2013. REITs were the next biggest buyer group, acquiring $1.7 billion over the same 5-year period (2013-2017)."

About Toormina Gardens Shopping Centre:

The highly accessible sub-regional shopping centre sits on a site of 5.8 hectares, and has a total GLA of approximately 21,200 square metres. It is located in Coffs Harbour, a major service centre between Sydney and South East Queensland. With a strong occupancy rate of 99%, with national retailers representing 80% of total income and including Best & Less, The Reject Shop, CBA, ANZ, Australia Post, Blooms Chemist, KFC, Subway, Donut King, Optus and OPSM. The shopping centre is anchored by Coles, Woolworths and Kmart and primarily convenience-based with three mini-majors, 40 specialty tenants and four kiosks.