A private South Australian investor has paid $12.95 million on a 7.57 per cent yield for Moelis Australia’s Hollywood Plaza Large Format Retail Centre at Salisbury Downs in Adelaide’s outer north.

The fully leased, 8080 square metre (GLA) centre returns an annual net income of $980,000 from six separate tenancies including Cheap as Chips, Supercheap Auto, Salvation Army and Anytime Fitness, with a weighted average lease expiry (WALE) of 5.8 years.

The 3.7-hectare site also offers significant value-add or expansion opportunities due to the low 22 per cent site coverage.

At a glance:

• SA retail centre in Salisbury Downs sells for $12.95 million on a 7.57 per cent yield
• The fully leased 8080 square metre centre returns an annual net income of $980,000
• Low site coverage of 22 per cent on the 3.7-hectare site offered buyers future expansion opportunities

According to CBRE Director Investments Justin Dowers, who brokered the Expressions of Interest deal with Mark Wizel, Kevin Tong, and Michael Fenton, the property attracted significant local and international interest ultimately eliciting seven formal offers.

“Enquiry was quite strong for an asset which offered a number of investment attributes including the centre’s full occupancy, the integrated nature of the six tenancies and the associated drawing power, along with the space available for future expansion,” Dowers said.

“The additional security offered by the fixed annual increases in each of the six leases, the centre’s strategic location opposite the Hollywood Plaza shopping centre - home to Woolworths, Coles, and Target – and significant main street exposure were also important factors.”

Moelis Australia Head of Real Estate Asset Management, Chris Monaghan, was pleased with the sale of a strong investment grade asset.

“The transaction of the property with its solid investment characteristics at an attractive yield speaks to the strength of the South Australian economy and retail property market,’’ he said.

CBRE’s Mark Wizel said the 3.7-hectare site presented investors with expansion opportunities, including mixed-use development, due to the low 22 per cent site coverage.

He said investors were therefore offered an asset with a strong existing income stream and the knowledge that the land component provided potentially significant additional income prospects down the track.

“There is no doubt that the future development upside was important in appealing to a wider group of potential purchasers,” Wizel said.

Dowers also said positive news regarding the South Australian economy was also noted by purchasers.

“South Australia is currently experiencing a period of growth buoyed by significant investment in key sectors including the ship building program and the $5 billion investment  in the largest teaching hospital in the Southern Hemisphere, projects which are expected to benefit the state for decades to come,” he said. 

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