The Parkes Arbour Shopping Centre, which houses Coles and a former Target store, has sold for $8.9 million to a Sydney private investor in what has been described as a rare buy.
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Real estate and investment management company JLL was in charge of its sale and said the regional neighbourhood centre attracted unprecedented interest, showing that demand for sites such as these, with value-adding opportunities, continues to outstrip supply.
JLL's NSW Retail Investments team of Sebastian Fahey, Dylan McEvoy, Nick Willis and David Mahood sold the shopping centre via an Expressions-of-Interest campaign on behalf of a Brisbane private investor, achieving a passing yield of 4.85 per cent.
Parkes Arbour is anchored by a Coles supermarket and supported by a Liquorland and two speciality retailers. The asset included a 4019sqm vacant ex-Target space, allowing an opportunity to reposition and/or redevelop the centre.
"Parkes Arbour Shopping Centre offered the purchaser an attractive repositioning play with the potential to significantly increase the centre's income by splitting the major vacancy into smaller offerings," Mr Fahey said.
"This resulted in the campaign attracting unprecedented demand for a regional neighbourhood centre with over 200 groups and 10 offers being received at the close of the campaign.
"Opportunities to acquire neighbourhood shopping centres with value-add upside are becoming increasingly rare as transactions in 2023 are down considerably.
"NSW neighbourhood transaction volumes totalled $124.4 million year to date, down more than 70 per cent this time last year."
Parent company Wesfarmers announced the closure or rebranding of more than 160 of its sites in 2020 with many of the locations being rebranded to Kmart or K-Hub.
The increasingly competitive market was too much for the Target business with landlords scrambling to backfill the vacancies.
Parkes Target was one of the stores affected, closing its doors for the last time after 14 years on September 5 that year. Forbes' Target Country also closed but was rebranded and reopened as K-Hub mid 2021.
"Parkes Arbour reaffirms the increase in demand for retail assets with value-add initiatives. Investors are continuing to seek these opportunities as they provide a secure holding income with significant upside through a repositioning play and or further development," JLL colleague Mr Mahood said.
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