Cessnock Big W centre fetches more than $13 million in off-market deal by Savills

Cessnock Big W centre fetches more than $13 million in off-market deal by Savills
Cessnock Big W centre fetches more than $13 million in off-market deal by Savills

A Big W-anchored retail centre at Cessnock in regional NSW has sold for $13.2 million on a passing yield of 7.6 percent in an off-market deal through Savills.

The 10 Darwin Street centre was sold 89 percent leased with a net annual income of just over $1 million and at a $/sqm rate of $1,648. The buyer was a Sydney-based private investor. 

Completed in 2006, the purpose-built retail complex comprises two separate buildings including a Big W discount store and two additional specialty tenancies in one building and three separate, large format, tenancies in the other. 

The 8,009 sqm of gross lettable area, which also includes Supercheap Auto and Repco, sits on a 19,290 square metre site. 

The deal was brokered by Savills’ Steven Lerche and Andrew Palmer. 

Lerche said the Cessnock centre is an attractive proposition offering a strong local catchment backed by robust regional population and employment growth and a more attractive income yield than comparable metropolitan assets.

The property had a short WALE due to a lease tail of only 4.5 years to Big W. 

“Demand for retail property investments remains at an historical high and so it was no surprise that we were able to place the property off market, especially given the tight yields for convenience anchored centres,’’ Lerche said.

The Cessnock vendor was a Melbourne-based investor. 

Big W, which is owned by Woolworths, reported a loss before interest and tax of $27.2 million in HY17 which includes a non-cash charge of $35.3 million, the company said in a note to investors. 

"We are currently reviewing the BIG W strategic plan and this will be completed in the next few months," said Woolworths CEO Brad Banducci, Woolworths CEO, in a press release as part of the company's half-year earnings for the six months ended December 31 

Woolworths reported a fall of 16.7 percent in its net profit after taxes from continuing operations although sales increased by 2.6 percent over the comparable period in the previous year.

Tags: 
Retail Sale Cessnock

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