JLL has announced the sale of Figtree Grove Shopping Centre, a premier sub-regional shopping centre in Wollongong, New South Wales. The transaction marks a significant milestone in the resurgence of retail investments. 

Figtree Grove Shopping Centre, ranking in the top 10 sub-regional assets in Australia (as per SCN Little Gun 2023 Rankings) by performance, comprises approximately 22,000 sqm of gross lettable area and generates outstanding annual sales of over $220 million. The centre is anchored by Coles, Woolworths and Kmart, complemented by 65 specialty stores, making it a cornerstone of non-discretionary shopping in the region.

The sale of Figtree Grove Shopping Centre was exclusively brokered on behalf of MA Financial & Paragon REIT by Nick Willis and Sam Hatcher from JLL, following a formal Expressions of Interest campaign. 

The shopping centre has been sold to one of the most active buyers of shopping centres in Australia, Fawkner Property, who have over the last 12 months added over $1.1 billion of shopping centres to their ever-growing portfolio. Fawkner’s most recent string of deals include Stockland Nowra which is in proximity to Figtree Grove, and the flagship Regional shopping centre Cairns Central which they acquired last year from Lendlease for $390 million.  

Nick Willis, Senior Director at JLL said “The depth and diversity of investor engagement in this opportunity is a clear indicator of the resurgence in retail and sub-regional sector specifically. Figtree Grove's strong and unique weighting to a non-discretionary tenancy mix was a key fundamental that attracted investors who are seeking resilient, future-proof assets.”

Mr Willis went on to say, “Sub-Regional shopping centres have emerged as a preferred asset class for those investors looking back at the retail sector, owing to their attractive risk-adjusted returns, growth potential, and long-term value proposition. The sale of Figtree Grove Shopping Centre marks the 15th sub-regional transaction this year, pushing the year-to-date transaction volumes to approximately $2 billion. Whilst there has been strong liquidity in the sector, acquiring 100% interest in top ranked sub-regionals like Figtree are seldom made available.”

JLL’s Head of Retail Investments, Sam Hatcher said “Figtree Grove's exceptional performance and unique positioning in the market drove significant investor interest. The short-term nature of major tenancy leases presents a unique opportunity for the incoming owner to reposition and enhance the asset over the long term.”

The retail sector has shown remarkable resilience and recovery over recent years. Shopping centre performance metrics have significantly improved, with occupancy rates at record highs. Positive leasing spreads have been reported by many institutional landlords, signalling a strong turnaround in the sector. 

A key factor is the constrained development and supply market, this year in Sydney, lettable area constructed numbers fell some 40% below the 10-year average. With subdued forecast supply, JLL anticipates that this imbalance between supply and demand will further reduce vacancy and drive strong forecast rental growth in the sector.

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