This article is from the Australian Property Journal archive
WOOLWORTHS has sold two supermarkets in New South Wales for a combined $45.7 million on a blended yield of 5.7%, continuing its active participation in the retail property market this spring alongside major rival Coles, as demand for freestanding supermarkets is expected to carry through to 2019.
Colliers International’s James Wilson and Lachlan MacGillivray negotiated the transactions of Woolworths Nelson Bay and Woolworths Lisarow, both completed in 2016, to high net worth private NSW investors.
More than 300 enquiries came from Sydney, Newcastle, Melbourne and Asia-based investors.
“Both Woolworths Lisarow and Woolworths Nelson Bay sold with offers delivered on contract, with two local NSW supermarket investors outperforming interstate and offshore rivals,” Wilson said.
Developed by Fabcot, Woolworths’ development business, both supermarkets have brand new 12-year leases, with 98% of the gross lettable area secured by Woolworths, with the investments boasting great depreciation benefits.
Last year, the freestanding retail sector saw a total 17 transactions nationally totalling $304 million.
“Freestanding assets have become one of the tightest and competitive markets among private investors, with secure income streams, significant landholdings and limited management requirements being key attractions,” MacGillivray said.
“There has been increasing competition from offshore private investors and funds looking to secure limited highly prized supermarket investments.”
“With food retailing continuing to outperform non-food retailing investment and the lack of quality stock on market, the demand for freestanding supermarkets is anticipated to continue into 2019,” he added.
Woolworths and Coles have both been selling off high-profile assets in recent months. Woolworths sold neighbourhood shopping centre in Perth’s outer north suburb of Aveley for $26.925 million to a private investor, at a yield believed to be a new benchmark in Western Australia.
It also put its Woolworths Seacrest at 75 Barrett Drive, five kilometres out of the Geraldton CBD, to the market at the same time. It includes catchment’s only full-line supermarket, and also has seven specialty tenancies and a pad site medical centre.
Meanwhile, Coles has just lobbed a newly built Kedron asset to the market ahead of its of its $3.9 billion spin-off from parent company Wesfarmers, which follows the listing of the Aurora Village neighbourhood centre in Melbourne’s northern suburb of Epping, dual-anchored by Coles and Aldi supermarkets.
Also up for grabs are the Coles Orana in Albany, Coles Vasse and Coles Express Vasse fuel and convenience station in Western Australia’s south-west corner, with more than $50 million expected.
In July, Coles offered the newly built Drysdale Coles supermarket near Geelong with hopes of fetching around $25 million, and earlier this year it sold the Parkwood Coles in Perth’s south-east for $31.95 million and the 1.4-hectare Torquay Village shopping centre for $35 million to Toorak investor David Feldman.
Australian Property Journal
