McVay said inner ring large format retail centres are always highly sought after but rarely offered for sale.
The lack of supply of the centres, with only 319 across the country, and the high turnover and generally low vacancy rates, has made them attractive to investors.
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One of the largest deals was last year with Goodman’s $200 million purchase of the Alexandria Homemaker Centre in South Sydney to add to its development pipeline.
Other recent transactions have been the $282 million acquisition of Sydney’s Crossroads Homemaker Centre by LaSalle Investment Management, Ashe Morgan’s $78.9 million purchase of Homemaker Prospect in Sydney.
A new CBRE report shows institutional buyers accounted for 55 per cent of LFR acquisitions in 2022, compared to just 29 per cent of the purchasing activity in 2021. Ongoing buyer interest is expected to be fuelled by housing demand, projected LFR rental growth and a limited supply pipeline.
CBRE research analyst Darcy Badgery said Australia has one of the second-highest projected population growth rates in the developed world at 15.3 per cent between 2023 and 2033, which, he said, is likely to drive significant demand for housing and an associated tailwind for LFR sales figures.
“This could also lead to a chronic LFR shortage, with just 711,845 square metres of space currently in the development pipeline between now and 2026 – equivalent to just 0.41sq m per additional person,” Badgery said.
From a rental perspective, CBRE’s report forecasts that Sydney and Melbourne will maintain the highest growth rates of 5.1 per cent and 3.9 per cent respectively in 2023, with these cities having the largest expected migration intake and associated population growth.
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