Rockingham Central sells for $28.5M

A newly completed large-format retail centre in Rockingham has been snapped up by WA property investment, development and syndication business Lester Group, with the asset changing hands for a purchase price of $28.5 million.

The deal, brokered by Cygnet West’s (formerly Colliers WA) Head of Investment Services Wayne Lawrence, settled on Friday (19 November) and saw Lester Group purchase the almost fully leased Rockingham Central from Arise Developments at a yield of 5.77 per cent.

The firm now known as Cygnet West, managed the centre on behalf of Arise Developments prior to the sale. Following settlement, the agency has been appointed by Lester Group to handle property management, leasing, marketing and facilities management for the asset.

Lester Group director Russell Lester said he was delighted to acquire the property.

“The capital raising was quickly oversubscribed, demonstrating a strong appetite from our investors for such an opportunity. The seven-year investment term offers solid income and capital growth from a diverse mix of tenants,” Mr Lester said.

The group was now looking for more opportunities on both the east and west coasts.

“We actively look for assets across Australia, seeking the best value, and building a diversified property portfolio to protect and grow value in all economic environments. Right now, the west coast appears to offer some prime opportunities,” he said.

Mr Lawrence said the large format retail sector had been a key focus for investor interest.

“Large format retail has been one of the clear winners out of the uncertainty, travel restrictions and lockdowns associated with the pandemic over the past 12-18 months,” he said.

“Consumers spending more time at home have funnelled their spending into household improvements and upgrading home comforts, which has driven strong sales and seen the large format sector outperform its retail counterparts.”

Located in Sepia Court, in the Rockingham City Centre, the three-level Rockingham Central comprises a number of large format retail spaces on the ground floor together with office and medical suites, a café, service station and convenience retail tenancies.

The centre, which was completed this month, sits on a 1.2ha site directly opposite the Rockingham Centre Regional Shopping Centre and comprises some 6,490sqm of net lettable area together with 117 car bays.

The centre is anchored by consumer electronics and whitegoods retailer The Good Guys, with other key tenants including 7 Eleven, kitchenware retailer Kitchen Warehouse, furniture retailer Adore Home Living and gym franchise Anytime Fitness.

A range of smaller tenants include Professionals Real Estate, Dentistry Plus, Best Body and Zambreros.

Less than 3 per cent of the centre’s NLA is currently vacant.

“While some of that household spending is likely to now ease as borders open and we move out of the shadow of COVID, sales in this area are expected to remain robust – meaning large format retail, particularly in a newly-completed and all but fully-leased asset, remains an attractive investment,” said Mr Lawrence.