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The sale of the “highly anticipated retail and lifestyle destination” reflects a “strong demand for essential service assets”.
The fully leased 1,578-square-metre Dockside Village shopping centre, anchored by IGA (Independent Grocers of Australia), has been sold to a local private investor for $13,459,805.
With the deal being conducted through a targeted off-market process by Colliers Queensland, agents Nick Wedge, Sam Polichronis, Harry Dever and Nick Dowling acted on behalf of Flux Property Group in brokering the sale.
“This is the second off-market shopping centre transaction by Colliers within the past few weeks, with Nambour Central sold off-market to an interstate first time shopping centre investor in late June,” Dowling detailed.
“These transactions demonstrate significant investor demand for strong performing assets on the Sunshine Coast.”
Wedge stated the off-market process targeting 10 high-net-worth private investors saw a “high level of engagement”, with the successful purchaser stated to be “looking for a defensive asset with future potential”.
“With 95 per cent of income from the asset anchored by national tenants, and a 15-year lease with IGA with options until 2049 securing 80 per cent of the centre’s gross rental income, this was a solid investment,” said Wedge.
Notably, Dever shared that the “strong 5.66 per cent yield” achieved in the sale of Dockside Village was exceptionally high, when compared to recently sold Queensland shopping centres anchored by IGAs.
“Dockside Village sets a new benchmark with the sharpest yield achieved for a Qld IGA anchored centre in the last 12 months and sharpest yield achieved for an IGA anchored centre on the Sunshine Coast for the last 24 months,” said Dever.
“Despite record-high debt costs, these tightly held neighbourhood centres continue to transact well below the cost of debt, highlighting the resilient nature of these non-discretionary-based assets.”
This sentiment was echoed with Polichronis, who highlighted that the investment offered exceptional income security through being 100 per cent leased with a long-combined WALE (weighted average lease expiry) of 14.2 years by area.
Flagging that Pelican Waters median house price has risen 80 per cent since March 2019, Polichronis considered the suburb “a high growth area that will benefit greatly from this new essential service”.
“Assets that offer essential services are more resilient to economic conditions, making them a less risky investment with a reliable income source and capital growth potential, making them a popular choice among investors,” he concluded.
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