Taylors Hill shopping centre for sale

Businessman John Shalit has listed the modern Watervale Shopping Centre in Melbourne’s west Taylors Hill.

The neighbourhood complex on 1.87 hectares could sell for in excess of $45m, according to sources.

Woolworths is the anchor, occupying 64 per cent of the 5286 sqm lettable area.

There are also 17 specialty stores, some occupied by essential services businesses, and 254 car parks.

Taylors Hill, part of the Melton municipality, is 22 kilometres from the city.

Stability a driver: agents

CBRE’s James Douglas with JLL’s Stuart Taylor, Tom Noonan and Sam Hatcher are representing Mr Shalit, who owns Construction Engineering (story continues below).

“The asset provides a highly resilient tenancy mix, underpinned by a long-term lease to Woolworths, expiring in 2030 with two further 10 year options, a strong medical offering and in-built fixed annual specialty rental reviews, key investment considerations driving buyer interest in this sector,” Mr Douglas said.

“Whilst we have seen significant yield compression in this sub-sector in the past 24 months, pricing metrics for neighbourhood centres remain attractive relative to prime assets in the office or industrial markets,” he added.

“Suburban retail assets have typically been dominated by private investors because of the lower yields, but REITs, unlisted funds and offshore investors are now active buyers,” according to the executive.

“The primary reason is the defensive stability of these assets and investors’ appetite for capital preservation in an environment vulnerable to external shocks”.

Five years ago, Mr Shalit was behind a plan to develop two 19 level apartment buildings on an L-shaped South Melbourne site covering 28-32 Albert Street and 13-21 Palmerston Crescent.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.