Colliers announce the off-market sale of East Warrnambool Shopping Centre on behalf of ASX-listed Region Group. The centre achieved a benchmark result of $20,080,000 with a yield sub 5.50% reflecting the sharpest yield for a Victorian neighbourhood shopping centre in 2024.

According to Colliers' latest 'Australian Real Estate Investment Review and Outlook 2025', the neighbourhood shopping centre market continues to demonstrate robust performance, driven by a strong focus on non-discretionary retail. The retail sector maintained its position as Australia's most traded commercial asset class for the second consecutive year in 2024, with 105 assets transacting for $7.07 billion. This volume was 12.6% higher than in 2023.

Despite neighbourhood retail transactions initially lagging behind historical averages due to limited opportunities, particularly in Victoria, the second half of 2024 saw a resurgence in activity. The total volume for Neighbourhood assets reached an impressive $1.37 billion nationally in 2024, marking an 18.0% increase compared to 2023.

Tim McIntosh, Colliers National Director | Retail Middle Markets, said, "The sale of East Warrnambool Shopping Centre represents the sharpest yield for a Victorian neighbourhood shopping centre in 2024, reflecting the depth in buyer demand for highly defensive non-discretionary retail investments as buyers forward outlook is firmly focused on interest rate reductions."

The fully-leased East Warrnambool Shopping Centre, located 222km from Melbourne CBD, features a defensive 94% weighting to national tenants, including anchor tenant Woolworths. The transaction underscores the strong investor demand for Woolworths or Coles-anchored neighbourhood centres, with East Warrnambool being one of only seven centre sales in Victoria in 2024.

"The Victorian retail market is at a very interesting point in the cycle, with the Australian dollar at the lowest level in 5-years, limited shopping centres offered for sale or under construction, and anticipated interest rate cuts, the stage is set for exceptional vendor outcomes in 2025," added Mr McIntosh.

The sale of East Warrnambool Shopping Centre follows other significant regional Victorian neighbourhood shopping centre transactions, including Gateway Plaza Shopping Centre, which sold for over $70 million in 2023, and Pakington Strand Shopping Centre, selling for over $30 million in the same year, both sold by Colliers.