An interstate private investor has purchased Noosa Junction Plaza from OzProp Capital for $35.2 million, reflecting ongoing demand for neighbourhood retail assets in tightly held coastal markets.
CBRE State Director Michael Hedger and Joe Tynan brokered the off-market deal, which represents a fully leased yield of 5.31 per cent.
The property sits on a 7,904sqm site at 81 Noosa Drive in Noosa Heads and comprises 5,126sqm of retail space anchored by Seasons IGA, KHub and 4 Pines Brewery, alongside 17 specialty stores.
“This transaction highlights the continued depth in the retail investment market with strong investor appetite for quality neighborhood retail centres, particularly those underpinned in irreplaceable locations such as Noosa that also have significant underlying land value,” said Hedger.
OzProp acquired the asset nearly a decade ago for $16 million before undertaking a refurbishment and tenant repositioning program. The firm achieved a 15 per cent internal rate of return during its long-term hold and has transacted more than $120 million across retail and industrial assets in the past two years.
“With continued pressure on construction costs and feasibility challenges, we are seeing well established centres that have strong trading performances coupled with replacement cost that sit well above pricing highly sought after,” said Tynan.
“This is the third retail investment that our team has transacted within the Noosa region over the past six months, totaling $90 million with the coastal regions, particularly the Sunshine Coast, having strong attention from a new wave of investors in the market as they see the region undergoing significant growth,” Hedger added.