Melbourne buyer snaps up 20m retail asset in Australia s melon capital

Melbourne buyer snaps up $20m retail asset in Australia’s melon capitalA Melbourne-based private investor with existing retail interests in Queensland has acquired the Woolworths Chinchilla shopping centre in the state’s Western Downs region in a deal valued at $20,055,000.The fully-leased neighbourhood centre has a gross lettable area of 3,878 sqm and is anchored by a strong performing, 2,808 sqm Woolworths supermarket.The other major tenant is The Reject Shop, alongside four complementary specialty stores, an ATM and a kiosk. The centre occupies a 9,002 sqm site, which provides for 177 car spaces.Michael Hedger and Joe Tynan of CBRE’s Queensland Retail Investments team negotiated the sale on behalf of a Brisbane-based private owner.Tynan said the campaign attracted strong interest with more than 70 enquiries and multiple offers. This significant demand translated to a yield on the sale of 6.38 per cent, which reflected $5,171 per sqm of building area.The purchaser is experienced in the ownership of shopping centres with existing retail interests in Queensland. “With interest rates at an all-time low, investors are increasingly looking at alternatives to low yielding investments such as term deposits,” Hedger says.”This is driving demand for smaller neighbourhood and supermarket-based retail centres which are less management intensive and offer long weighted average lease expiry profiles.”Hedger says a growing number of South East Queensland retail owners are “considering their options”, given the current strength of buyer demand.Chinchilla is located approximately 160 km north-west of Toowoomba and 2 km north-west of the Brisbane CBD. Agriculture is the main driver of the local economy, with Chinchilla producing around a quarter of Australia’s melons.