“The Broadmeadows Central acquisition continues the trend of private investment groups, syndicates and, to a lesser extent, institutional investors taking out passive stakes in retail assets alongside institutional managers,” Rooney said.

“This allows institutional partners to reduce gearing and maximise the use of capital while maintaining management fee income.”

The Broadmeadows Central acquisition delivers Nikos a half-share in strategically located, 129,703 square regional centre north-west of the Melbourne CBD. It is anchored by Kmart, a triple supermarket offering of Aldi, Coles and Woolworths, alongside Hoyts Cinemas and more than 115 specialty stores.

Rooney said the Vicinity offering had attracted interest from various parties, highlighting the continued appetite for well-located, professionally managed centres in metropolitan locations.

“There is a continued bifurcation between these types of assets and centres in regional locations, albeit sub-regional centres that dominate their catchments are still highly sought after,” Rooney said.

Other recent sales include Telstra Super’s $120.5 million sale of a 50 per cent interest in Sydney’s Carlingford Court to JY Group.

On the heels of the sale, Vicinity is moving to sell the adjoining Homemaker Centre Broadmeadows through CBRE’s Rooney, who said the campaign will provide an opportunity to acquire a 100 per cent interest in the 33,500 square metre asset, amid ongoing investor interest in large-format retail investment opportunities.

In regional NSW, the Tamworth Homespace is another large-format retail sale by a private investor that will test the demand for the sector.

It sits on a significant 31,160 square metre land holding, and has flexible zoning allowing opportunity for development and value-add strategies. The centre is anchored by The Good Guys and Fantastic Furniture and supported by a mix of 13 large format retailers.

JLL’s Nick Willis, Sam Hatcher, Sebastian Fahey and David Mahood have been appointed to sell the 100 per cent interest in the centre and said the large format retail sub-sector has seen a resurgence in investor appetite recently.

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“[It is] spurred largely by the strong trading performance of the retailers, coupled with the forecast rental growth and the irreplaceable nature of the assets given the significant increases in construction costs recently,” Willis said.

“Furthermore, large-format retail assets have been tightly held with no centres trading in the year to date, and sales volumes down on the increased trading activity of last year, which was up 76 per cent on the historic five-year average.”

Hatcher added that large-format retailers are expanding their businesses due to strong sales performance, however limited new developments and higher construction costs are resulting in rental growth pressure.

“As a result, large format retail was one of only two retail property sub-sectors to record a decline in vacancy rates since the onset of COVID-19,” Hatcher said.

In research from JLL in retail investments, the report said sector in 2023 is largely underpinned by attractive asset pricing, new sources of capital entering the sector and strong market fundamentals flowing on from 2022.

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JLL’s head of capital market research – Australia, Andrew Quillfeldt, said that while rising debts costs are a concern for highly leveraged investors, for the majority of institutional real estate owners in Australia, debt management has remained relatively conservative regarding gearing and interest cover ratios post the GFC.

“However, some fund managers may choose to selectively divest assets to maintain a conservative position ahead of potential further devaluations in 2023,” Quillfeldt said.