The major town centre development sector is experiencing a strong resurgence across Australia’s eastern seaboard, with over $100 million in transactions recorded in the past 12 months alone. This renewed activity is evidenced by the recent sales of two significant sites in Victoria: Aurora Southern Town Centre and Rockbank Town Centre (VIC).
This wave of activity represents a notable shift in market sentiment, particularly in Victoria where no major town centre site had transacted since 2021 prior to the sales of Rockbank Town Centre and Aurora Southern Town Centre.
Julian White, National Partner at Stonebridge Property Group, commented: “These recent transactions mark a genuine return of confidence in the town centre sector, which is especially apparent in our current on-market campaign for the Sunbury Town Centre in Victoria which is seeing strong buyer engagement.”
He added that while major town centre developments are typically more complex than neighbourhood activity centres, strategic subdivision is unlocking substantial value.
“Diligent groups are increasingly segmenting town centre sites – divesting residential and pad site components to specialised developers. This structured approach is delivering enhanced realisation rates for individual components, often exceeding the original blended purchase rate.”
Justin Dowers, National Partner, noted a broader market dynamic at play, driven by constrained retail supply and improving fundamentals: “With retail supply remaining limited, developers are beginning to benefit from strong rental growth, securing higher rates in their recent and upcoming projects. As the rental growth cycle continues, retail development feasibilities are improving, and we are seeing astute developers position themselves accordingly.
This heightened demand for town centre assets is also reflected in the broader retail investment market, which recorded a 35% increase in transaction volume for the 2024 calendar year. This uplift highlights growing investor confidence in the sector and signals a positive outlook for retail-led mixed-use developments in both metropolitan and growth corridor locations.”
Off the back of this renewed momentum, Stonebridge Property Group will soon launch the Menangle Park Town Centre to market via an Expressions of Interest campaign. Located in a major Sydney growth corridor, the asset comprises an 7.35-hectare landholding across four separate lots.
“Menangle Park Town Centre presents a rare and exceptional opportunity to acquire a landmark mixed-use town centre development site in the rapidly growing South West Sydney corridor. With an expanding local population and significant infrastructure investment planned for the area, the site is poised to attract a diverse range of developers, investors, and institutional stakeholders. said Alex James-Elliott, Director.
In a market characterised by a shortage of investment-grade Sydney metropolitan neighbourhood shopping centres, this development opportunity offers a compelling pathway for groups seeking to secure one of the most sought-after and stable asset classes” he added.
This pipeline of activity across both Victoria and New South Wales underscores a broader resurgence in demand for town centre assets, driven by tightening supply, strong population growth, and an increasingly supportive retail leasing environment.
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