Region divests two Victorian shopping centres

Also today we are reporting Woolworths bought Essendon’s Niddrie Central.

Region Group, formerly known as Shopping Centres Australasia Property Group, or SCP, has divested two Victorian shopping centres for sub six per cent yields.

The Wyndham Vale mall has a portion (shaded) available for development.

In the biggest deal, the 15 year old Wyndham Vale Square, at 205 Greens Road (pictured, top), about 35 kilometres west of Melbourne’s CBD, fetched $25.1 million.

Central Equity co-founders are buying Drouin Central.

The result for the under-utilised property – the 4599 sqm mall occupies a 1.94 hectare Commercial 1 zoned block with a prominent 2375 sqm portion able to accommodate more product, like a fast-food restaurant – reflects a c5.98pc return.

Woolworths is the anchor, with a 4013 sqm tenancy; it also contributes to 70pc of the income.

All specialty stores are rented to non-discretionary businesses.

Region held the property in the Metro Fund, with GIC.

Sydney based Lata and Mukesh Gupta, first time investors, are the buyers.

The centre is co-located with an Aldi, owned by a separate party.

Drouin Central

Meanwhile, an entity controlled by Karl Kutner, the son of Central Equity co-founder Eddie, and Dennis Wilson, the other business creator, has paid Region $20.4 million – a 5.88pc yield – for Woolworths Drouin Central.

At 72-100 Young St, the 3779 sqm complex is also anchored to Woolworths which contributes to 77pc of the ($1.2m) rent.

Its tenancy is the only full-line supermarket in the Main Trade Area, about 90km south east of Melbourne’s CBD, the marketing agents said. Drouin is also about 30 kilometres from Pakenham/Nar Nar Goon, the edge of the ever-changing Urban Growth Boundary.

The group’s lease agreement also includes percentage rent (story continues below).

Woolworths anchors Drouin Central, 90 kilometres from Melbourne.

There are also four specialty stores.

The incoming owners will be eligible for a 50pc stamp duty concession – the property being classified regional.

IP Generation sold Torquay Village last year.

Region sells down

Region comprises the Shopping Centres Australasia Property Management Trust and Shopping Centres Australia Retail Trust.

The Wyndham Vale and Drouin malls were listed with Leura Place, in the New South Wales blue mountains, late last year; they form part of a $200m sell down to retire debt.

“Both properties were acquired by new entrant buyers with enquiry and bidding levels well above what we typically see in these sale processes,” JLL’s Stuart Taylor, who marketed the properties with Tom Noonan and Sam Hatcher, said.

“We attribute the heightened interest to the defensive quality of the income profiles on offer, with private capital looking to the neighbourhood shopping centre sector as an attractive balance of security and yield,” he added.

Only two regional Victorian malls traded in 2023 – as well as Drouin, Chris Lock’s IP Generation sold Torquay Village to a Malaysian investor for $50m, in November.

All up for the state the value of shopping centre deals for the period is $276m – up 158pc on last year but down 53pc on 2021.

“We expect to see elevated activity in this sector in 2024, with pricing adjustments occurring and significant depth in demand evident from private capital,” Mr Noonan said.

Also today we are reporting Woolworths paid $51m for Niddrie Central, in Melbourne’s north east Essendon, following an off-market deal.

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Marc Pallisco

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