A high-net-worth (HNW) private investor has acquired Flagstone Village in South East Queensland for more than $26 million following a hotly contested Expressions of Interest campaign.

CBRE’s Joe Tynan and Michael Hedger negotiated the transaction on behalf of Coles Property Group amid strong investor demand for near new neighbourhood shopping centres in high growth

The on-market campaign generated over 165 enquiries and four competitive offers. The top bidder, a HNW Sydney-based investor, presented an unconditional offer which reflected a strong yield circa 6%.

The recently constructed centre has a gross lettable area of approximately 4,604sqm and is anchored by a circa 3,614sqm high performing, full-line Coles supermarket. It includes seven specialty retail tenants and provides strong security via a long 7.7-year WALE by income.  

“Investors continue to actively pursue new neighbourhood shopping centres with a clear focus on defensive, non-discretionary retail assets given the highly resilient nature of these investments,” Mr Tynan said.

“The strategic location of Flagstone Village was one of the key attractions for the purchaser, with the Flagstone region identified as a Priority Development Area (PDA) and Queensland’s 2nd largest residential growth corridor, with forecast population growth of 8.6% per annum until 2041. The centre offers the region’s largest full-line supermarket servicing this rapidly growing Main Trade Area.”

Mr Hedger noted that there was a limited construction pipeline of high-quality neighbourhood shopping centres, with Flagstone Village presenting a rare opportunity to acquire such an asset for below replacement costs. This follows a rise in construction prices, which have impacted development feasibilities.

“A limited number of shopping centres have been formally offered to the market this year, with transactions volumes in 2023 being at one of the lowest levels in 15 years,” Mr Hedger said.

“The neighbourhood sector has dominated the total national sales volume, accounting for 64% of all shopping centre transactions as investors look for resilient assets with predictable cashflow in these uncertain economic conditions – a trend that is forecast to continue in 2024.”

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