Victoria’s shopping centre market has recorded $1.37bn in deals this year, with investors increasingly competing for a limited pool of supermarket-anchored suburban centres.
The suburban shopping centres where Victorians buy groceries and everyday essentials are attracting big money as investors compete for the few hitting the market.
There have been just seven public sales campaigns in Victoria this year, yet Colliers has recorded 13 shopping centre transactions worth $1.37bn.
Nine of the 13 transactions involved neighbourhood shopping centres, with those deals worth $611m.
RELATED: Victorian gov forces homeowners to reveal sold property prices
Dud Albo ploy turning Vic home dream to nightmare
That value is 146 per cent above the three-year average.
Colliers national director of retail middle markets Tim McIntosh said a growing share of sales were being concluded with parties invited to the negotiating table.
Some familiar Victorian shopping centres have attracted nine-figure sums.
Colliers national director Tim McIntosh says more Victorian shopping centre deals are being struck off-market or through invitation-only campaigns.
Contracts have exchanged on a $327.5m deal for a 50 per cent interest in The Glen at Glen Waverley.
Other major deals this year have included Burwood Brickworks at $107.25m, Tooronga Village at $79m and a Coles and Aldi-anchored centre at Kilmore for $38.88m.
Another Woolworths-anchored suburban centre is now testing that demand.
Contracts have exchanged on a $327.5m deal for a 50 per cent interest in The Glen at Glen Waverley, the biggest transaction in Colliers’ Victorian tally.
Tooronga Village changed hands for $79m this year as familiar suburban shopping centres attracted major investor interest. Picture: David Crosling
Epping North Shopping Centre has hit the market with price hopes in the high-$30m range.
The 5376sq m centre is 99 per cent leased, with Woolworths occupying about two-thirds of its space and generating 44 per cent of its rental income.
Woolworths has about eight years remaining on its lease, while another 16 tenants include pharmacy, medical, dental, food and personal-service businesses.
Woolworths occupies about two-thirds of Epping North Shopping Centre and generates 44 per cent of its rental income.
Epping North Shopping Centre has hit the market with price hopes in the high-$30m range as buyers chase supermarket-anchored suburban centres.
JLL senior director Stuart Taylor said supermarkets and essential-service tenants could provide steadier income because households continued to need them when discretionary spending tightened.
“We are seeing both private and institutional capital aggressively compete for these assets,” Mr Taylor said.
JLL also said the City of Whittlesea’s population was forecast to grow 56 per cent by 2041, with more than 53,200 additional homes targeted across the municipality.
CBRE’s figures provide a more conservative test of the rise in neighbourhood centre activity.
JLL senior director Stuart Taylor says private and institutional buyers are competing for centres anchored by supermarkets and essential services.
Using RCA classifications and completed investment sales only, CBRE recorded three Victorian neighbourhood centre deals worth $174m this year.
CBRE research manager Cameron Douglas-Perrine said activity was “higher than the last few years, but comparable with levels in 2022”.
CBRE recorded $175m across five neighbourhood centre deals in 2022.
Its broader retail research also shows the limited availability of quality properties is suppressing transaction volumes while increasing competition and pricing pressure.
But stronger buyer demand has not been matched by booming neighbourhood centre rents.
CBRE recorded just 0.4 per cent annual growth in neighbourhood centre net face rents to June, compared with 4.7 per cent at regional centres.
Together, the figures point to investors prioritising established centres with secure supermarket and essential-service income rather than relying on rapid rental growth.
Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox.
MORE: The Block 2027: Sunbury’s former psychiatric hospital to become five homes