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Vicinity divests two retail precincts

Terrace Central_33_hiresShopping centre owner Vicinity Centre has sold two retail precincts for a total of $77 million.

Wondonga Plaza in Victoria and Terrace Central in Raymond Terrace,  were sold for $43.5 million to M/Group and $33.5 million to Panthera Property, respectively.

Vicinity’s chief investment officer Michael O’Brien said both centres were considered non-core assets.

JLL negotiated the sale of Terrace Central on behalf of Vicinity Centres, representing a 12 per cent premium to Vicinity book value and a passing initial yield of 6.55 per cent.

“We continue to see institutions divesting assets within their portfolio which are non-core to their investment strategy,” said David Mathews, JLL’s director, sales & investments NSW.

“Conversely, private investors, syndicates and boutique funds management groups are seeking to grow their exposure to the tightly-held neighbourhood shopping centre sector.

“The long term leases to major national retailers offer stability and defensiveness, which investors are seeking at present. The non-discretionary aspect of the assets ensures low volatility of the trading profile (MAT) and the yields in the neighbourhood sector remain attractive in the current low-yield environment.

“The New South Wales retail market has nationally been the outperformer, given the State’s strong economic performance. New South Wales has had the lowest rate of unemployment of all the major Australian States since May 2015.”

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