Dexus unloads Shepparton Marketplace to Singapore’s Sim Lian-Metro Capital for $88.1m

Shepparton Marketplace in regional Victoria has been snapped up by Singapore private real estate fund management business Sim Lian-Metro Capital.

The flagship wholesale fund run by Dexus is selling the Shepparton Marketplace in regional Victoria to Singapore private real estate fund management business Sim Lian-Metro Capital for $88.1m.

The sale shows the continuing demand for subregional centres despite rising interest rates hitting both consumer confidence and lifting finance costs.

Sim Lian-Metro Capital is looking to expand its local portfolio of office and retail assets to about $1.2bn at a time when some other buyers are out of the market.

SLMC is a venture between the Singapore-listed Metro and its partner, the Sim Lian Group of Companies. It is buying the centre, which the Dexus Wholesale Property Fund picked up from a private investor for around $70.6m in 2014.

CBRE’s Simon Rooney and James Douglas brokered the off-market deal after the campaign drew strong private and institutional investor interest, with pricing reflecting a capitalisation rate of 6.25 per cent.

“The level of buyer interest in the Shepparton Marketplace process demonstrates the continued depth of demand for quality subregional shopping centre assets, particularly centres offering value-add opportunities,” Mr Rooney said.

The Singaporean venture could remix the centre’s speciality tenants and capitalise on the 61,700sq m of vacant land by developing. The existing 16,535sq m centre is anchored by strongly performing Woolworths and Big W stores on leases until 2030.

Sim Lian-Metro Capital has bought Shepparton Marketplace in regional Victoria for $88.1m

Shepparton Marketplace is the only fully enclosed shopping centre with a discount department store in the town. It opened more than 30 years ago as a freestanding Big W store and Woolworths supermarket.

It was redeveloped in 1998 to incorporate specialty shops and expanded further in 2005. The centre is Shepparton’s major retail centre, and the coming sale shows the subregional sector remains active.

SLMC has been active and believes that Australian shopping centres will perform. It acquired Cherrybrook Village Shopping Centre in Sydney last year, and the listed Metro boosted its stake to 30 per cent for both its Australian portfolio of 16 properties and the asset management company.

The group bought the Cherrybrook centre from Mirvac for about $132.8m. That 9,381sq m centre in Sydney’s northwestern suburbs has a Woolworths supermarket, Martelli’s Fruit Market and 51 specialty tenants.

Metro and Sim Lian held 16 freehold properties comprising four office buildings and 12 retail centres spanning across four states – NSW, Victoria, Queensland and WA – ahead of the latest acquisition.

Metro entered Australia in November 2019 by investing a 20 per cent stake in a portfolio of 14 quality freehold office and retail properties by entering into a joint venture with Sim Lian.