Large-format retail portfolio finds fresh hands

“The large-format sector continues to attract growing investor demand,” Mr Willis said.

“The sector has seen strong tailwinds following COVID, coupled with the limited availability in new supply which is leading to rental growth pressure.

“The large-format retail sector is the only retail property sub-sector to record a decline in vacancy rates since the onset of COVID-19, highlighting the robust nature of the sector.”

This month ASX-listed Newmark Property REIT made its first acquisition since listing at the end of last year, a $57 million large-format retail centre in suburban Brisbane. That property changed hands on a 5.15 per cent yield.

At the smaller end of the investment horizon, some wealthy investors have been acquiring individual retail assets on super-tight yields of below 3 per cent, but buying debt-free, with a focus on cash flow.