CVS Lane and Consolidated Properties have put a $500m SEQ retail centre portfolio up for sale

With a surge of investor interest in defensive retail properties five extensively refurbished South East Queensland shopping centres worth more than $500m are set to test the market.

Karalee Shopping Village is on the market with four other South East Queensland retail centres.

A $500m South East Queensland neighbourhood shopping centre portfolio is on the market and expected to draw offshore and local institutional and private investor interest.

Melbourne-based boutique property investment house CVS Lane Capital Partners and Brisbane’s Consolidated Properties Group (CPG) have kicked off a formal sales and marketing campaign for five shopping centres within a retail class which has experienced unprecedented demand.

CVS Lane chief executive Lee Centra said it was a “good opportunity” to test the market.

“CVS Lane and CPG have received multiple unsolicited offers for the assets over the past 18 months, reflecting this unprecedented level of demand,” he said.

“The assets have gone from strength to strength in terms of their valuations and sales performances and proven very resilient in the face of major disruptions in recent years, such as the pandemic and severe weather events. “

The centres, which are all anchored by either Coles or Woolworths supermarkets, and in some instances both, are all in high growth areas.

Karalee Shopping Village is on the market with four other South East Queensland retail centres.

CPG chief executive Don O’Rorke said their strategy was based around finding assets that offered strong refurbishment and development potential to hold for the long-term.

“We’re proud of what we have achieved with each of these shopping centres in terms of improving their facilities and their retail offering and that shows in their performances,” he said.

“We have a strong pipeline of leasing inquiry which also speaks to the value of these assets.

Our partnership with CVS Lane is always evolving and dynamic and we regularly look for new value-adding opportunities and we feel this is a good time take these assets to market.”

JLL’s Jacob Swan and Sam Hatcher and CBRE’s Joe Tynan, Michael Hedger and Simon Rooney have been appointed joint agents to sell Karalee Shopping Village in Ipswich, Pavilions Palm Beach on the Gold Coast, Wilsonton Shopping Centre in Toowoomba, Great Western Super Centre Keperra in western Brisbane and Arndale Shopping Centre in Springwood.

Arndale Shopping Centre in Springwood

Mr Swan said investor demand for neighbourhood shopping centresl has soared with a shift towards defensive assets with low-income volatility.

Last year 61 neighbourhood centres to sold nationally transact nationally, with a record deal volume of $2.45bn – 22 per cent above the previous 2019 high.

“There remains significant equity capital available for low-risk retail assets – from a range of domestic and offshore institutional sources, such as pension funds and unlisted core funds,” Mr Swan said.

“As a result, we’re seeing a tactical reallocation towards neighbourhood retail centres, underpinned by a strong daily needs offering, given the resilient performance through Covid-19 and the high-income returns offered relative to prime assets in other sectors.”

Mr Tynan said the fundamentals of Queensland-based retail assets have performed very strongly, primarily driven by population growth, including high levels of interstate migration for lifestyle reasons and housing affordability.

“The significant population shift has provided a strong tailwind for grocery retail and neighbourhood shopping centres in the past two years,” he said.

“In fact, retail turnover in supermarkets has grown by 16.8 per cent in Queensland since the start of the pandemic, well above the national average of 12.4 per cent.”