Two investors pay $60 million for three pieces of Northcote Plaza
Two chunks of the Northcote Plaza shopping centre, in Melbourne’s inner-north, have sold for a total of $60 million.
In the larger deal, the Kmart store and an adjacent Coles supermarket are trading to one buyer for a combined $35 million.
Kmart is set to quit its space at the end of next year.
The Coles, meanwhile, is, amusingly, one of two within Northcote Plaza.
Coles moved into this strata-titled space to prevent a competitor from doing so after taking over the stores of the former occupier, discount supermarket rival, Bi-Lo, after 2006.
Both Coles and Bi-Lo are owned by Wesfarmers.
Combined the Northcote Kmart and Coles properties occupy a hectare of land which the incoming owner plans to redevelop in the medium term.
In a second deal, a larger Coles outlet and adjoining Liquorland at the northern edge of the complex sold for $25 million.
JLL’s Tom Noonan and Stuart Taylor, with Leiba Commercial’s Marc Leiba, are believed to have negotiated the off-market deals.
All agents declined to comment when contacted.
What to do with a problem like Northcote Plaza?
Northcote Plaza is considered an ownership disaster, with its 18,000 square metres of space strata titled and controlled separately, in much the way owners share a block of flats.
The result is a tired centre, with few prospects of a refurbishment – especially a major one – because, for amongst other reasons, owners might never all agree to invest beyond basic maintenance.
Sources speculate that longer term Northcote Plaza strata owners might unite and sell to a developer, or seek a joint venture partner which could see an extension, renovation, and utilisation of the airspace.
About six kilometres from the CBD, the shopping centre is located on Separation Street, next door to a smaller retail complex, Northcote Central, which sold in 2017 for $34 million.
As well as the retail component, Northcote Plaza accommodates the Acacia apartment tower – considered the first ‘suburban’ high-rise following the introduction of the controversial (and now redundant) Melbourne 2030 policy, which sought to redevelop infill sites near public transport with housing.
Acacia overlooks All Nations Park – a former landfill.
