New Zealand-based Cook Property Group has bought the Entrada Shopping Centre in the heart of Parramatta for $41.32 million, reflecting a yield of 5.7 per cent.
The the 5,570sqm Coles-anchored centre, which was developed by Dyldam Developments in 2011, is located in a high profile corner position – and supported by a number of specialty retailers, medical centre and child care provider.
The centre, which also includes 196 car parks, is underpinned by a 20-year lease to Coles and total weighted average lease expiry of 10 years.
CBRE Retail Investments’ Justin Dowers, Nick Willis, Mark Wizel and Peter Vines negotiated the sale of the centre on behalf of Centennial Property Group.
“The sale of Entrada Shopping Centre further highlights that the market is pricing strata retail investments at a similar level to freehold investments,” said Dowers.
“This is related to the lack of freehold centres offered for sale, but also an increased level of confidence in how these centres perform and the acceptance of this retail platform from the customers.”
Dowers said strata retail centres are generally developed in highly built up areas where major supermarkets have found it difficult to get a presence in.
“The benefit for owners of these assets is that they generally provide consistent rental growth underwritten by population growth, and the competition risks are much less when compared to outer growth areas of major capital cities,” he said.
Willis said the property’s position in Greater Western Sydney’s growth corridor underpinned strong buyer interest in the asset.
“We received a lot of interest from interstate and international investors given their desire to obtain retail holdings in Sydney – and more specifically the western growth corridor, noting the forecasted population growth in this region,” Willis said.
Ben Cook of Cook Property Group said the Entrada Shopping Centre is a good strategic fit for his Sydney portfolio.
“The anchor tenant, Coles, is enjoying exceptional turnover growth as a result of the centre’s prime location,” Cook said. “The barrier to entry for a competing development is significant, Parramatta’s growth story is compelling and the income generated from the asset is mostly non-discretionary.”
“This fits with my investment model of acquiring defensive assets in core Sydney locations, with excellent growth prospects,” he added.
Willis said major growth precincts in Sydney’s west such as Parramatta and Westmead were benefitting from significant investment that was helping underpin demand for retail amenity.
“Investors see this as an opportunity to gain exposure in Australia’s most exciting future cities,” Willis said.
“With over $10 billion worth of development occurring including the Light Rail, Parramatta Stadium, Parramatta Square and the Westmead Hospital, coupled an estimated 30,000 new dwellings in the region, the future income potential of Western Sydney will continue to underpin investor confidence.”
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