MRL Investments pay $15 million for St Lucia Marketplace in a deal that realised a 5.5 per cent fully leased yield

An inner Brisbane neighbourhood marketplace with an IGA supermarket has been sold for $15 million after attracting more than 10 offers.

An aerial of St Lucia Marketplace.

AN inner city IGA-anchored neighbourhood centre attracted strong interest and almost a dozen offers before being snapped up by an investment company for a 50 per cent plus premium on what it sold for less than four years ago.

In its first foray into retail Brisbane-based MRL Investments paid $15 million for the St Lucia Marketplace in a deal struck by CBRE’s Joe Tynan and Michael Hedger on behalf Marquette Properties.

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Mr Tynan said the expressions of interest campaign attracted 134 inquiries and 11 serious offers from local, interstate and offshore investors that were all within 15 per cent of the final price.

“The level of inquiry and bidding was above average for this category of shopping centre, primarily due to its prime location and solid investment fundamentals,” he said.

On a 3033sq m site at the corner of Hawken Drive and Boomerang Rd, St Lucia, it has a gross lettable area of 1960sq m.

It was sold with a weighted average lease expiry of just over six years and IGA operator Hopper Group takes up 50 per cent of the property and is on a 15-year lease.

The refurbished St Lucia Marketplace.

St Lucia Marketplace when Marquette Properties bought it in 2016.

Mr Tynan believed the 5.5 per cent fully-leased yield was a new record for an IGA shopping centre in Queensland.

“We are continuing to see significant yield compression for neighbourhood shopping centres that offer security through a tenancy profile of non-discretionary retailers,” he said.

“There is increasing competition from new capital in the market. More than 40 per of inquiries came from new investors.”

Marquette purchased the property in 2016 for $10.2 million for a fund as a “value-add play”. At the time the deal realised a 7.18 per cent yield.

Marquette managing director Toby Lewis said after the purchase they completed a major cosmetic upgrade, re-set the IGA lease and signed up new tenants.

“Marquette is all about buying assets, making them better, and onselling demonstrably different properties to what we bought.,” he said.

“Our investors have enjoyed great cash flow and now a significant capital gain.”