Neighbourhood malls in hot demand with $850m in listings

Private owners of neighbourhood shopping centres which have been the best performers in sales and capital growth during the pandemic-hit years as consumers were forced to stay close to home to work and shop, are testing investor appetite with than $850 million in deals.

The high demand for these suburban centres has continued with hybrid work practices seeing more people congregating more often in their own areas. As a result, prices for the assets are reaching levels that have made their city-based cousins very envious.

Two of the more prominent properties in Sydney’s north have been put on the market as the long-time owners test the water for demand even in the time of rising inflation and interest rates.

The 25,000 square metre St Ives shopping village is being offered by the private Katz family for the first time in 36 years with price expectations said to be more than $650 million. Bumping up the price is the 11 adjoining properties that come with the mall.

“The demand for town centre assets is exceedingly high following a record year of sales in 2021.”

Colliers MD Retail Capital Markets, Lachlan MacGillivray

E.K. Nominees Pty Limited has owned the properties, located along Mona Vale Road and in Denley Lane, since 1986 and for 10 consecutive years, the mall has outperformed industry benchmarks to rank in the top 5 nationally within its category and has been ranked first or second for sales performance in Shopping Centre News’ annual ranking of Mini Gun Shopping Centres.

Colliers managing director Asia Pacific retail capital markets Lachlan MacGillivray is advising on the sale and said being one of the country’s best-performing retail centres the potential to add significant further value, “sets the property apart from anything else in the market”.

“The demand for town centre assets is exceedingly high following a record year of sales in 2021,” MacGillivray said.

“As one of the last key privately owned retail assets in the country, combined with the trophy nature of this unique and highly ranked asset, we expect strong demand from a wide range of international buyer groups.”