DEXUS Property has expanded its retail footprint with the $160 million purchase of two large, NSW regional malls - including Wagga's Sturt Mall.

DEXUS Wholesale Property Fund (DWPF) paid $98.5 million for the Deepwater Plaza in Woy Woy and $61.2 million for Sturt Mall.

JLL head of retail investments Australia Simon Rooney, who acted for DEXUS in the two new sales and is selling the other assets, said retail investment activity has picked up significantly in the second quarter this year.

The sale of Deepwater Plaza promptly follows the sale of Riverside Plaza, Queanbeyan, and Golden Grove in South Australia for $129.1 million.

''Last year was a record year for the subregional (malls between 10,000 and 30,000 square metres) market with $1.9 billion transacting across 2013,'' Mr Rooney said. ''We expect this subregional trend to continue to dominate the retail investment market throughout the remainder of 2014, and could see activity reaching the record levels achieved last year.''

He said investors are targeting subregional centres for the attractive yields available, to capture income and value growth over the medium term and to add to their exposure in the retail sector.

The sales agent for Deepwater was Steve Lerche, Savills national director, retail investments, on behalf of private investor Jerry Schwartz. He said the shopping centre dominates its market and was offered for sale for the first time in more than 20 years.

''The subregional shopping centre sector has also recently attracted plenty of interest from listed and unlisted buyers as well as private and offshore investors,'' Mr Lerche said.

DWPF fund manager Graham Pearson said the two malls support the fund's active investment strategy of investing in high quality subregional shopping centres that focus on non-discretionary food, convenience and service retailing.

Mr Pearson said acquisitions would be financed from existing debt facilities and would result in an increase of the fund's total assets to $5.2 billion.