Perth-based RG Property has sold a convenience-based shopping centre in the Melbourne suburb of Dandenong for $29.1 million to a Chinese investor at a yield of 5.19 per cent.

The Village Dandenong is anchored by a full-line Woolworths Supermarket and BWS Liquor and supported by 15 specialty retail tenancies.

Located approximately 35km south-east of Melbourne CBD, Dandenong forms part of Melbourne’s thriving south-eastern growth corridor and is one of Victoria’s largest economic hubs and fastest-growing regions.

At a glance: 

• The Village Dandenong in Melbourne's south-eastern growth corridor has been sold to a Chinese investor for $29.1 million, reflecting a yield of 5.19 per cent. 
• The convenience-based shopping centre is anchored by a full-line Woolworths Supermarket and BWS Liquor and supported by 15 specialty retail tenancies.
• The off-market transaction was brokered JLL’s Stuart Taylor and Ming Xuan Li on behalf of Perth based RG Property Group.

The transaction represents the 5th Victorian neighbourhood shopping centre sale to be completed in 2020 (3 of which have been sold by JLL) totalling $118.93m and an average weighted initial yield of 5.47 per cent.

JLL's Stuart Taylor, who brokered the transaction with Ming Xuan Li, said the strong pricing achieved in the off-market transaction confirmed the robust demand for non-discretionary retail assets.

Source: JLL 

“The neighbourhood shopping centre market has demonstrated liquidity in the first half of 2020, with pricing remaining firm," he said.

"Transactions have been driven by the defensive nature of the income streams and the continued ability to access cheap debt.”

He added assets such as The Village Dandenong were being viewed as an investment ‘safe-haven’ in the current climate given they derive the majority of their income from essential service businesses such as Woolworths and Coles supermarkets.

Source: JLL 

“Supermarkets outperformed during the peak of the pandemic in March, with monthly retail trade growth of over 23.0 per cent," he said.

"Despite the ABS preliminary retail trade figures for April falling by 17.9 per cent, food retailing figures remained higher than in April 2019.” 

RG Property CEO Rhett Williams said the sale price reflected an "excellent outcome" for the company's investors. 

"The completion of the transaction builds upon our track record of identifying value opportunities and executing on those strategies," he said.

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