Kerching rings up $12.6m from Sandstone Point Village

Sandstone Point Village is majority leased to essential service retailers.

Kerching Capital has sold Sandstone Point Village – a modern shopping centre in Brisbane’s outer north – for $12.6 million.

The deal, with a private investor, was struck at a 6.5 per cent yield – which the marketing agency said compares stronger than the pre-COVID level average.

The Perth based vendor acquired the 9236 square metre property near Bribie Island in 2016 paying $10.4m, reflecting a circa seven per cent return.

With a supermarket and seven specialty stores, the shopping centre earns annual rent of $830,000.

CBRE’s Michael Hedger co-marketed the neighbourhood centre then, for Property and Pathways.

The same agent, with Joe Tynan, represented Kerching, a boutique investment manager, this time.

Sandstone Point Village: income generating development site

The Sandstone Point complex at 204-208 Bestmann Road is about a 65 kilometre drive north east of the Queensland capital.

With 2389 sqm of lettable area, it covers a small land component – the agents promoting any incoming owner could easily build into the 158-bay car park and immediately up annual income $150,000 to nearly a million.

A larger redevelopment could also be considered, possibly creating tenancies to attract occupiers needing greater space.

Prior to it being offered for sale in 2016, a 15 year lease was secured with the biggest tenant, IGA (story continues below).

Before listing it this time, Kerching negotiated a seven year agreement with the next largest renter, a medical centre.

Combined, these businesses contribute two thirds to the income.

There are seven specialties; BWS, a dentist and hairdresser are other essential service retailers to fill them.

Sandstone Point Village has a 5.8 year Weighted Average Lease Expiry.

Demand outweighs supply, even for retail

Eight genuine bids came in for the asset, Mr Hedger said.

“We continue to see strong demand for well-located neighbourhood shopping centres, particularly those that have traded well through the COVID period,” according to the executive.

“Centres that offer a long WALE and demonstrate resilient income profiles are transacting at a premium”.

Mr Tynan added “in the current environment of low cash returns and cheap lending, we’re fielding strong interest in securely leased retail assets, however few quality properties are coming to market”.

Two occupiers – an IGA and a medical centre – pay 65 per cent of Sandstone Point Village’s income.
The Sandstone Point site spreads 9236 square metres.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of