Regional Large Format Retail Centre transacts at the sharpest yield recorded in the last 18 Months showing renewed market confidence

Renewed market confidence has seen strong buyer demand for Warwick’s thriving Home & Life Centre with an $11.8 million sale to a Victorian based private investor.

Located on the Cunningham Highway in Warwick, the 2,865 sqm retail centre was transacted by the Colliers Retail Middle Markets team Harry Dever, Marlon Crawford and James Wilson.

Colliers Queensland Associate Director Retail Middle Markets Harry Dever said “The campaign attracted significant interest with 190 enquiries and 7 formal offers, with interest from both private and institutional capital both local and interstate”.

“This transaction saw the sharpest yield recorded for a QLD regional Large Format Retail centre in the last 18 months reflecting a 6.44% yield,” Harry Dever said.

“We closed the expression of interest (EOI) campaign just before Christmas and took the property off the market to engage in negotiations with a select group of shortlisted parties.

“It became evident during these negotiations that there was a renewed sense of confidence in the market as we entered 2024. This sentiment was further supported by the recent pause in the interest rate cycle, with indications pointing towards potential rate cuts by year-end.

“In recent years, the Large Format Retail (LFR) sector has outperformed, propelled by robust tenant activity, population growth, and restricted supply. These factors have spurred increased investor attention toward the sub-sector, which historically has been tightly held.

“Colliers research data shows that Queensland’s committed LFR supply out to 2025 currently only represents 49,428sqm, of which this majority is dedicated to the Brisbane Metro Area. Further underpinning the scarcity and tightly held nature of existing LFR Properties, especially in Regional Cities,” Mr Dever added.

Warwick Home & Life Centre is a brand-new fully tenanted centre with retailers including BCF, Petbarn, Doctors & Co, Café 63 and Anytime Fitness.

The retail centre holds a prime position within Warwick CBD, with the nearest outlets for the brands located 80 kilometres away.

Occupying a 6,048 sqm site, Warwick Home & Life is highly visible Albion Street and the Cunningham Highway – a major arterial road that facilitates easy access to neighbouring towns and major cities, and is serviced by 63 at grade car parks.

Colliers Head of Retail Middle Markets James Wilson said, “The investor market has evolved in early 2024, with campaigns such as Warwick Home & Life generating a high proportion of offers from first time shopping centre investors.

“Feedback from ‘cashed up’ first time shopping centre investors has largely focussed on renewed confidence aligning with their view that the current interest cycle has peaked, allowing them to engage with increased confidence”.

Colliers Queensland expert Marlon Crawford said, “There is significant ongoing investment in the Southern Downs LGA, that will support the development of the local economy and population.

“The town is a location of choice for business, investment, and employment. The region’s abundant industry diversity and transport infrastructure underpin its role as a major hub for Southeast Queensland’s agricultural, manufacturing and food processing, health and aged care, tourism, and transportation,” Marlon Crawford added.

The centre is situated in the Southern Downs booming regional corridor lying 130 kilometres south- west of Brisbane, and 70 km from Toowoomba.