Cessnock Big W Centre Sells for $13.2m

27 February 2017

A Sydney based private investor has paid $13.2 million for a Big W-anchored retail centre at Cessnock in regional NSW on a passing yield of 7.6 percent in an off-market deal brokered by Savills Steven Lerche and Andrew Palmer.

Mr Lerche said the 10 Darwin Street centre was sold 89 percent leased with a net annual income of just over $1 million and at a $/square metre rate of $1,648.

Completed in 2006, the modern, purpose-built retail complex comprises two separate buildings including a Big W discount store and two additional specialty tenancies in one building and three separate, large format, tenancies in the other. The 8,009 square metres of GLA, which also includes Supercheap Auto and Repco, sits on a 19,290 square metre site with 291 on grade parking spaces.

Mr Lerche said the Cessnock centre is an attractive proposition offering a strong local catchment backed by robust regional population and employment growth and a more attractive income yield than comparable metropolitan assets.

“Cessnock offered a superb opportunity for an investor to acquire a near new, well-presented and well-established regional property that requires limited management, with a solid tenancy profile, a captive market and great potential for capital growth,” Mr Lerche said.

Mr Lerche sold the property off-market by approaching a few targeted investors. The property had a short WALE due to a lease tail of only 4.5 years to Big W.

“Demand for retail property investments remains at an historical high and so it was no surprise that we were able to place the property off market, especially given the tight yields for convenience anchored centres,” Mr Lerche said.

The sale backs up the strong pricing achieved for the Vicinity Centres’ Kmart-anchored sub regional centre, Maitland Hunter Mall, which sold to a private investor for $22.25 million on a passing yield of 6.65 percent in October, while selling agents Mr Lerche and Mr Palmer are currently marketing another Hunter region centre, the 12,838 square metre Muswellbrook Marketplace which is anchored by Woolworths and Big W.

The Cessnock vendor was a Melbourne based investor.

Learn more about Savills Retail Investments.

 
 

Key Contacts

Steven Lerche

Steven Lerche

National Director
Retail Investments

Savills Sydney

+61 (0) 2 8215 8929

 

Andrew Palmer

Andrew Palmer

Associate Director
Retail Investments

Savills Sydney

+61 (02) 8215 8952