Achieving a core cap rate of 7.43%, Katherine Central Shopping Centre was sold by Ben Parkinson and Rick Silberman of Savills Retail Investments.
Katherine Central is anchored by a Woolworths supermarket and Target Country, with a diverse tenancy mix including BWS, Rockmans, Smokemart, Amcal, and Brumby’s.
The off-market deal negotiated on behalf of Charter Hall shows that private investor demand has been strong despite the geographical location of the shopping centre, given the consistent income growth underpinned by the exceptional supermarket performance.
‘The investment fundamentals of Katherine Central are testament to the significant interest the asset generated. With the Woolworths generating upper quartile turnover, the right amount of specialty shops and minimal competition, it’s no wonder the purchaser saw value in the asset.”
“As Katherine’s only shopping centre, the property plays a vital role in supplying residents in surrounding rural areas with crucial access to retail goods,” said Ben Parkinson, National Head of Retail Investments at Savills.
“Katherine Shopping Centre is also an essential tourism stopover to nearby attractions such as Katherine Gorge and Nitmiluk National Park.
“The Centre enjoys an excellent market share within an expansive 500 kilometre main trade area in the Northern Territory,” Mr. Parkinson added. “Aside from the Woolworths in Katherine, the closest full line supermarket is in Darwin, 316 kilometres away.”
The 7,159sq m Katherine Centre also immediately adjoins a retail and commercial development known as the Southgate Centre and the Katherine Hotel.
Major industries other than tourism include the RAAF Tindal Air Base along with mining and grazing. The RAAF Tindal Base is approximately 15 kilometres southeast of Katherine and is home to several flight squadrons. This local market and long term employment base underpins the success of Katherine Central.
“The total retail spending market generated by the overall trade area population is estimated to be around $212 million,” said Rick Silberman, Director of Retail Investments at Savills.
“This amount is expected to increase on average by 4.2% per year, reaching around $346 million for the overall trade area, including $268 million in the Primary Sector and immediately surrounding Katherine.”
“Proposed significant upgrades should provide further economic benefits to Katherine and local businesses. The sale is a significant economic win not only for Katherine, but for much of the Northern Territory, and investment in Katherine shows no signs of slowing down.”