Trek to Horsham mall no obstacle for Chinese buyer
A Chinese investor has paid $14.55 million to buy a country mall, the Horsham Gateway Centre, in Victoria’s western district.
The tyranny of distance proved no obstacle to the buyer, as investment into retail property assets is still flowing from China, despite well-publicised efforts by the Chinese government to put brakes on outbound capital.
The deal was struck on a 7.8 per cent yield, softer than some recent transactions. That may reflect the fact the mall is anchored by a Wesfarmers-owned Target, with discount department stores coming under pressure recently.
Set on a 1.2-hectare site on Wilson Street and owned by a local private developer, the mall was brokered by CBRE’s Mark Wizel, Justin Dowers and Kevin Tong.
Six specialty retailers are in the centre too, along with a component of commercially zoned land at the site’s rear, with the potential for future development.
Mr Dowers said the property attracted interest from local, interstate and offshore global investors. The successful purchaser outbid a number of local private groups, as well as Singaporean funds.
“There is no doubt that investors’ view of discount department stores has tapered off the back of inconsistent performance,” Mr Dowers said. “However, it was imperative for this campaign to focus on the opportunity of having a large space leased to a major company like Wesfarmers.
“In the long term, having 3000 square metres to 7000 sq m of retail space currently leased to DDS tenants in prime-located centres will be strategic, as there will likely be a higher and better use for the space in the future.”
The Horsham deal is the latest in a steady flow of Chinese acquisitions. And it is not the first regional retail asset acquired by investors from China.
A shopping centre at Nagambie in regional Victoria sold for $7.8 million to a Chinese investor on 6.1 per cent yield last year.
Also last year a mainland Chinese investor snapped up a new Bunnings Warehouse in Yarrawonga in regional Victoria for $11.5 million, on a sub-5 per cent yield.
“The lack of supply of metropolitan shopping centres meant that Chinese investors are looking into regional locations and chasing the strong tenant covenants,” Mr Tong said.
Over the past 24 months, Chinese investors have spent more than $410 million acquiring shopping centres across Victoria, on CBRE figures.
There have been big deals in Melbourne as well, including the $43.5 million sale of Springhill shopping centre in the city’s south-east to a first-time mall buyer from China, on a 5.5 per cent yield.
