Chinchilla Woolworths sold for $20 million
THE sale of Woolworths Chinchilla to a Melbourne-based private investor for $20 million has been hailed as a vote of confidence in Chinchilla's property market.
Surat Basin Property Group's Greg West said the acquisition, which was announced on Friday, was a positive for the region.
"From what I'm reading there was about 35 people tendering at it, which is probably an indication that the property market has definitely reached the bottom and is turning around when you're seeing a sizable transaction like that happening,” Mr West said.
"It's pretty exciting for the property market.”
Michael Hedger and Joe Tynan of CBRE's Queensland Retail Investments team negotiated the sale on behalf of a Brisbane based private owner.
The fully leased neighbourhood centre has a gross lettable area of 3878qm and is anchored by a strong performing, 2808sqm Woolworths supermarket.
Mr Tynan said the Expressions of Interest campaign attracted strong interest with over 70 inquiries and multiple offers received at the close.
This significant demand translated to a yield on the sale of 6.38%, which reflected $5171 per square metre of building area.
A sale at a higher yield of around 10% would have signified less confidence in the local property market.
The purchaser is experienced in the ownership of shopping centres with existing retail interests in Queensland.
Mr Hedger said with interest rates at an all-time low, investors are increasingly looking at alternatives to low yielding investments such as term deposits.
"This is driving demand for smaller neighbourhood and supermarket-based retail centres which are less management intensive and offer long weighted average lease expiry profiles,” Mr Hedger said.
"We have observed that a growing number of south-east Queensland retail owners are considering their options, given the current strength of buyer demand.”