Brisbane headquartered private equity and syndication firm Altor Capital has sold the Cooloola Cove Shopping Centre for a price of $18.66million to the listed SCA Property Group. The off-market transaction was negotiated by Peter Tyson of Savills Australia. 

The off-market transaction was negotiated by Peter Tyson of Savills Australia and has set a new benchmark yield for regional Queensland of 5.85%, surpassing previous records.

The Woolworths anchored Cooloola Cove shopping centre, located in the Cooloola Cove township 50 kilometres north-east of Gympie in south-east Queensland, features 10 specialty shops.

Altor Capital divested the centre after purchasing it only three years prior, when it acquired the centre for $12.85million in a transaction also brokered by Peter Tyson in 2018.

Altor Director Phil Rhodes commented “The original acquisition suited our investment model. We were attracted to the yield and growth potential, underpinned by long lease security to Woolworths and the ongoing population growth. Over our short term of ownership. we focussed on repositioning the specialty tenant mix to a nucleus centred around daily needs and essential services.”

“After introducing new uses, including a large medical centre, and resetting existing core tenant leases, the strategy culminated in a sale of the asset delivering our investors strong running returns coupled with significant capital uplift” said Rhodes.

Savills’ National Director of Retail Investments Peter Tyson noted “By focussing on daily needs, Altor’s strategy brought more rigour to the tenancy mix and drawing power of the centre and enhanced income.” “Having followed the journey with Altor Capital and see their strategy delivered, it is pleasing to crystallise the outcome for the group with a record yield result.”

In summarising retail market conditions, Tyson also noted “The 2020 year was disrupted with the Covid lockdown and remained supressed with the retail sector more thinly traded than prior years and numerous divestment plans aborted by would-be sellers.”

“Interestingly, the retail sector experienced a number of positive side effects from the Covid experience, including an uplift in non-discretionary spending by consumers at the local neighbourhood centre. Investors have been quick to recognise the income security flowing from anchor tenants such as Woolworths and Coles, and low-risk nature of assets that service the demand for daily needs and essential services.”

“A further positive outcome has been monetary policy adjustments which saw the RBA move to cut interest rates at three intervals through the year by 65bps to the lowest level in Australian history, setting the cash rate at 0.10% in November.”

“The combination of these factors has seen heightened investor demand for quality retail centres. Convenience based neighbourhood centres anchored by Coles, Woolworths and IGA in the sub $30 million price point are becoming scarcer in the market” Tyson said.

“Throughout the GFC and again during Covid, this asset class has proven its resilience. Retailers deemed "essential" provide our communities with daily needs can continue to expect heavy traffic. The value these retailers offer goes far beyond product and revenue, they play an integral role in our society, from our food supply chain, to employment, to the availability of necessary goods and services.”

Tyson noted “Cooloola Cove Shopping Centre is the dominant food and service destination situated in a wide-ranging trade area. Located in the master planned residential community of Cooloola Sands the centre services an expansive trade area which also services the nearby communities of Tin Can Bay and Rainbow Beach”.

To request a copy of the sale analysis please email the selling agent Peter Tyson of Savills via the contact form below.