Bitternfields Shopping Centre, an IGA anchored neighbourhood shopping centre located on Melbourne’s Mornington Peninsula has sold for approximately $12 million reflecting a record breaking 4.08% initial yield. 

The JLL Retail Investments team of Tom Noonan, Stuart Taylor, MingXuan Li and Jarrod Herscu handled the off-market sale process on behalf of the Vendor, a Melbourne based private investor.

Bitternfields Shopping Centre which comprises a small format IGA Supermarket and 12 specialty shops is located in the suburb of Bittern on Mornington peninsula, which is approximately 82 km from Melbourne CBD.

Stuart Taylor, Senior Director of JLL Retail Investments said “the strong pricing achieved is an injection of confidence in the Melbourne retail investment market, and confirms that investors continue to bid aggressively for well leased shopping centre assets.”

Mr Noonan added “The centre comprises a tenancy mix which is solely essential services and acts as the daily shopping destination for the local Bittern area. This style of retail asset has proven to be highly resilient and accordingly attracts some of the most competitive commercial real estate buyers.”

“The yield achieved in this sale is one of the sharpest neighbourhood results achieved in Victoria and a record for an IGA anchored centre nationally” Noonan added.

According to JLL Research neighborhood shopping centres traded at record high volumes in 2021 with AUD 707.6 million across 19 deals in Victoria and AUD 2.9 billion across 59 deals nationally – a record year by more than $900m. However, Bitternfields Shopping Centre is only the second neighbourhood centre to transact in Victoria in 2022 YTD. 

Taylor commented, “the lower transaction volumes seen in the first half of this year is largely supply driven, after the record number of centres trading last year.” 

“Whilst there is a degree of caution in the market resulting from the changing landscape of rising interest rates and higher inflation, demand for neighbourhood shopping centres remains elevated, driven by the defensive nature of the income streams and the depth of capital sources chasing opportunities in the asset class” Taylor added.

The property was purchased by a private investor from Mainland China. JLL’s head of Asia Markets MingXuan Li commented “Asian capital remains active in the Australian market and with the opening of borders, we expect to see heightened activity from Asian buyers in back half of 2022.”

“Chinese buyers in particular are showing increased activity in shopping centre assets, particularly those that are in inner-city or high-growth metropolitan locations” Mr Li added. 

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