Raine and Horne Commercial

33 | INSIGHTS SPRING 2018 Robin Brenchley, Gary Quig and Bruce Kinley of Raine Horne Commercial Retail Services manage suburban neighbourhood shopping centres throughout New South Wales. Robin says 2018 has been a very busy year. He explains, “We are seeing large numbers of private investors buy into smaller and regional shopping centres. These assets are generating yields of around 6.0-7.0% and that’s vastly more a ractive than the cash rate, which is delivering returns close to zero after allowing for inflation”. Gary adds that foreign investors – especially Chinese investors, are considerably less active than they were twelve months ago. As a guide to market activity, earlier this year unlisted investment fund Fort Street Real Estate Capital, which is a client of Raine & Horne Commercial Retail Services, purchased Toormina Gardens Shopping Centre in Coffs Harbour from Vicinity Centres and the Abu Dhabi Investment Corporation. The sale price of $83.3 million reflected a fully leased yield of 7.0%. The centre is anchored by Coles, Woolworths and Kmart, and has a near-zero vacancy rate across its 55-plus specialty outlets. In the mid-West city of Orange, the Summer Centre which features dual anchor tenants of IGA and Dan Murphy’s, was sold to a private investor for $13.5 million. Gary says, “This property was a highly sought-after asset that a racted multiple offers. The appeal of this property centred on its value add and development potential.” According to Robin, we’re really seeing a lot of these centres evolve at present. Those that include a medical centre have extra appeal for investors as it makes the centre more of a one-stop-shop for consumers, and this helps to a ract tenants. Gary adds the changing nature of retail trade means tenants that rely on discretionary spending such as fashion outlets are less likely to be “chased by landlords.” He continues, “What we are really seeing is a focus on food. Ten years ago, a centre may have had a fast food outlet and an Asian restaurant. These days, centres are tapping into lifestyles by providing a variety of dining outlets. People are eating out more often and centre owners need to create external areas for alfresco dining to create atmosphere. It really is the way forward for centres of all sizes.” Retail Services Highlights SPECIALIST SERVICES | Retail Services These days, centres are tapping into lifestyles by providing a variety of dining outlets. People are eating out more often and centre owners need to create external areas for alfresco dining to create atmosphere. It really is the way forward for centres of all sizes