For the first time in seven years, the Elermore Shopping Centre in Elermore Vale, just 9kms west of Newcastle has sold.
A private syndicate snapped up the neighbourhood centre for circa $18 million on a 6.8 per cent passing net yield.
Savills Australia national director of retail investments Steven Lerche said the area is booming.
“Newcastle is seeing a surge in investment activity, largely stimulated by the $6.55 billion State Government investment mandate which has brought to light the new light rail system on Hunter Street, the new transport interchange at Wickham, construction of the Newcastle City University Campus and much more.
“We are seeing a lot of investor interest come from the Sydney investment market and interstate markets such as Melbourne and Brisbane due to the significant growth prospects of Newcastle.
“Retail assets have been in particular favour with developers due to their strategic locations, large site area, existing income stream and potential to re-develop under the existing planning controls."
Located at 133 - 137 Croudace Road, the single level centre comprises a large Ritchies SUPA IGA supermarket supported by 17 non-discretionary specialty tenant.
It has 4,048sqm of gross lettable area on a 23,882sqm site including additional land ready for development, car parking for 235 vehicles and an estimated fully leased net income of circa $1.44million.
Newcastle is the largest regional economy in Australia and is the second most populated area in NSW.
Elermore Vale is a popular and established residential suburb surrounded by schools, childcare centres and community facilities, with a key primary population of 5,759 residents and an estimated population of 20,459 within the main trade area.
Savills associate director of retail investments Andrew Palmer said more activity is predicted.
“The median house price in Newcastle is $595,000 compared to approximately $1.17million in Sydney (according to Domain Group’s rental and house price report) and investors are taking notice.”