Torquay Village sold again
ONE of Torquay’s major shopping centres has changed hands again, with Torquay Village being sold off-market for an undisclosed price.
Today (Monday, November 27), Fitzroys announced its director Paul Burns had negotiated the sale of Torquay Village, at the corner of Bristol Road and Payne Street.
Previously owned by IP Generation, the shopping centre has been purchased by a private Malaysian investor who has various property holdings in Australia.
Fully leased, Torquay Village comprises a 4,056sqm full-line Coles supermarket as well as 14 specialty tenants and one ATM for a total lettable area of 6,779sqm.
The centre is on a 14,030sqm site with 260 car parks and 260 metres of street frontage, centrally located in the Torquay retail precinct.
It has a long weighted average lease expiry of 7.6 years by income and 8.19 years by area.
This week’s sale – for a reported price of about $50 million – follows IP Generation purchasing the centre for $40 million in 2021, and Coles Group Property Developments selling it for $35 million in 2018.
“Amid the broader market slowdown and a highly publicised gap between expectations of sellers and vendors, neighbourhood shopping centres have continued to trade strongly and on healthy yields on the rare occasion that they’ve come up for sale,” Mr Burns said.
“Investors are seeking surety and so turning to defensive bricks-and-mortar assets with essential services tenants that have proven their resilience through the turbulence of the past few years.
“The current higher interest rates clearly haven’t deterred investors from pursuing high-quality opportunities.”
He said most of the specialty tenants at Torquay Village were non-discretionary retailers.
“Some specialty tenants are currently paying turnover rent, and Coles are close to their turnover threshold so rental growth is imminent. This was an attraction to the purchaser.
“Good centre management has resulted in Torquay Village trading very well, and despite the challenging economic conditions, there are no vacancies and there’s been strong demand from businesses looking to move into any available specialty shops.
“Torquay Village has excellent trade prospects given its central location on the Surf Coast, which continues to benefit from sea changers and significant new residential developments in nearby locations such as Armstrong Creek.
“IP Generation have added significant value to Torquay Village during their ownership, delivering a high-quality tenancy mix to complement a strongly performing Coles. It is an outstanding long-term passive investment.”
The deal marks the second time in 12 months IP Generation has offloaded one of its Torquay properties, following its sale of a mixed-use, multi-tenanted building in Baines Crescent for $40 million in 2022 in an off-market deal also negotiated by Fitzroys and Paul Burns.
“This transformative period for the Surf Coast is continuing to have a profound effect on its commercial property market,” Mr Burns said.
He said the 50 per cent stamp duty discount applying to regional Victorian commercial property purchases was an additional attraction to the purchasers of Coles Village and the Baines Crescent development.