Stonebridge Property Group have transacted another freestanding Victorian regional investment, as yields for the in-demand asset class track closer to 5%.
The property (Spotlight Plaza in Sale Victoria) was positioned on a 6,774sqm* landholding, underpinned by a 10-year gross lease to Spotlight and 3 boutique shops, which combined provided a total net annual income of ~$240,000.
The anchor tenant ‘Spotlight’ forms part of Australia’s Spotlight Group, a $4bn private company also behind Anaconda, Mountain Designs & Harris Scarfe.
Stonebridge agents Rorey James, Justin Dowers, Kevin Tong & Nic Hage handled the Expression of Interest campaign on behalf of veteran Melbourne based fund manager Castlerock, who have recently acquired a government leased asset in Ipswich Queensland for $145.2m. “We’ve held the Spotlight asset for over 10 plus years and it has performed well during that period for our investors, many of them local” stated Castlerock Director Adam Bronts.
Kevin Tong, Director of the Stonebridge Asia Practice team, noted “The property sold for $4.55million which equates to approximately 5.2% yield to a first time Chinese investor who has recently missed out on a few other investments with our team.”
“We are seeing increased interest from international Asian investors for regional investments, especially given the growth they are witnessing firsthand in some of these core regional hubs. When you couple this with long leases to national tenants it makes a healthy investment for what many offshore groups are looking for.” Added Mr. Tong
Stonebridge offered Spotlight Plaza in Sale Victoria to the market via an international Expression of Interest campaign that formally closed on the 30th June 2021.
Rorey James noted, the process was somewhat hindered by Melbourne’s most recent lockdown, with restrictions on travel making inspections impossible for Melbourne based investors. Ultimately the decision was made to strategically extend the campaign, whilst still allowing groups the opportunity to submit their positions before the 1st July stamp duty increase.”
“The decision paid dividends for Castlerock, with the 3 most aggressive groups all putting forward unconditional contracts - clearly wanting to take advantage of the saving.” “To achieve a yield in the low 5% range exceeded our own expectations and highlighted for us the demand for quality assets across Australia” added Bronts.
Records show Sale has seen a string of investment activity over the past 12 months with the Pets Domain selling for $1,888,0000, IGC Medical Centre for $1,165,000 and an officed leased to accounting firm Findex Group selling for $1,150,000.
On the other side of Melbourne, the Stonebridge team sold a similar regional investment in the Bendigo CBD. The opportunity comprised 7 leased shops and sold ‘under the hammer’ in a hotly contested boardroom auction for $6,750,000, more than $2,000,000 over the vendor’s reserve.
Justin Dowers “A regional population shift, or at least the stigma around it, coupled with a temporary 50% stamp duty saving is creating huge attraction towards regional investments. In recent months we have seen regional Victorian retail yields compress to a level close to, and in some cases in line with, Metropolitan Melbourne.”
