australian property market wrap 03102023
Image: Canva.
  • An LFR centre in Perth sold for over $74M.
  • A South Yarra retail property sold for over $2.4M.
  • A 4,353 hectare estate in Tasmania has been listed for sale.

Today’s wrap features a mix of retail sales, from large format to the bustling South Yarra, as well as over four thousand hectares of beautiful Tasmanian Central Highlands coming to market.


HomeCo Midland divested for over $74M

HomeCo Daily Needs REIT (ASX: HDN) has divested HomeCo Midland to national property investor and developer, PWD, for $74,750,000.

Situated in the burgeoning Midland region of Western Australia, 15 kilometres northwest of the Perth CBD, the asset comprises an LFR centre with 23,400 sqm of lettable area and direct at-grade car parking.

JLL’s Nick Willis and Sam Hatcher jointly with Vend Property‘s Jeff Klopper handled the divestment of HomeCo Midland.

In a year of record low investment supply across capital markets, LFR assets have been one of the most thinly traded asset classes in the retail sector. Volumes for retail transactions in 1H23 are down 50% on 1H22, and with only 30 deals, this year’s first half now represents the lowest on record.

homeco midland sold for 74 million dollars to pwd
HomeCo Midland has been sold to PWD for $74,750,000. Image: Supplied.

“Given the robust performance of the LFR sector and its strong underlying fundamentals being land rich and almost irreplaceable given the rise in construction costs, we are continuing to see demand from well-capitalised parties able to transact,” said Willis.

“However, amassing portfolios of scale is difficult with investment supply of institutional-grade assets tightly held, as the majority of the market is controlled by a handful of players.”

“Western Australia and the broader national LFR market remains tightly held and controlled by a limited number of key ownership groups including HomeCo’s Daily Needs REIT and Harvey Norman,” said Hatcher.

“The sale of HomeCo Midland is a major LFR transaction for Western Australia, a market which only experiences on average two (2) LFR deals per annum, indicating the tightly held nature of this market.”

“With significant barriers to entry for new product in Perth we look forward to strong trading growth in this Centre supported by major population increases forecast in nearby growth centres,” said PWD co-founder, Rob Thomas.

South Yarra retail property acquired for $2.4M

Lulo Investments has acquired 131 Toorak Road for $2.416 million. The transaction reflects a building rate of $18,303 per square metre and a yield of 3.57%.

The property came to market earlier this year and comprises a land parcel spanning 148 sqm, a gross floor area of 132 sqm, 5.7 metres frontage to Toorak Road, and is tenanted to the esteemed florist Victoria Whitelaw, who has been a cornerstone of the property for more than 20 years. The property is zoned ACZ1.

Cushman & Wakefield’s Karim Ford, George Davies, Jeff Ha, and Eva Ni managed the sale in collaboration with Kristian Peatling and Warwick Bramich of Alexander Robertson.

131 Toorak Road sold to lulo investments for 2.4 million dollars
Image: Supplied.

The campaign generated 115 buyer inquiries, 18 contract requests, and 23 property inspections.

“The competitive bidding process attracted interest from four distinct groups, including owner-occupiers, local investors, and even an offshore group based in China, who enthusiastically participated in the auction over the phone,” said Ford.

“This sale underscores South Yarra’s enduring appeal as a prime investment destination and sets a strong precedent for future real estate opportunities in this vibrant Melbourne suburb” he said.


Tasmania’s ‘Hermitage’ comes to market

A rural Tasmanian property known as Hermitage has been listed with Knight Frank’s Rob Dixon and Mark Ranicar.

Located at 530 Waddamana Road in Hermitage, the 4,353 hectare estate is located in Tasmania’s Central Highlands region, and offers a vast farming operation, and has been farmed under management since its last transacted in 1991.

The property has been tightly held over the past 50 years, being owned by only three families including its current owner, John Rose.

The Hermitage, which has a total riverfrontage of 38 kilometres to the Shannon River and River Ouse, includes a double-storey colonial sandstone homestead built circa 1822 with five bedrooms, in addition to a three-bedroom manager’s dwelling and a one-bedroom cottage.

hermitage tasmania for sale
Image: Supplied.

Other improvements include a shearing shed and associated sheep facilities, as well as multiple barns, implement sheds, machinery sheds, an abattoir, garages, stables and cattle yards.

It has a mixture of arable grazing areas running cattle and sheep, with timber and bush patches, an all-weather surface airstrip to provide ease of access, and the property is equipped with irrigation, both centre pivots and flood irrigation tapping into 17 kilometres of the Shannon River.

Nature and conservation have played an important role in management decisions, the result of which is an abundance of flora and fauna, in harmony with the farm’s more commercial enterprises.

Knight Frank’s recently released The Rural Report 23/24 found there was a growing demand for agricultural land in Australia as the buyer pool widens in line with the variety of growing and innovative uses for rural properties, including for the new asset class of natural capital.

It found there was growing interest in carbon-related income for agricultural investments as sustainable practices gained prominence, with corporate institutions moving to offset their emissions and enhance their environmental credentials.

“The Hermitage is of such a size that it was gazetted as a locality of its own in 1966,” said Ranicar.

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