This article is from the Australian Property Journal archive
SUPERMARKET Coles-anchored neighbourhood shopping centre, Torquay Village, has sold for around $50 million, netting vendor IP Generation a $10 million capital gain in just two years.
Located at the corner of Bristol Road and Payne Street in the popular Surf Coast destination, around 97km out from the Melbourne CBD, the fully leased Torquay Village comprises a 4,056sqm full-line Coles supermarket, 14 specialty tenants and one ATM across 6,770sqm of total lettable area.
Paul Burns, director at Fitzroys, negotiated the off-market sale to a private Malaysian investor who holds numerous properties in Australia, on behalf of IP Generation for what is believed to be a circa $50 million sale price.
IP Generation acquired Torquay Village in 2021 for $40 million from Toorak investor David Feldman, who bought it three years earlier from Coles for $35 million.
“Amid the broader market slowdown and a highly publicised gap between expectations of sellers and vendors, neighbourhood shopping centres have continued to trade strongly and on healthy yields on the rare occasion that they’ve come up for sale,” said Burns.
“Investors are seeking surety and so turning to defensive bricks-and-mortar assets with essential services tenants that have proven their resilience through the turbulence of the past few years,”
The centre sits on a 14,030sqm site and includes 260 car parks and 260 metres of street frontage in the centre of the Torquay retail precinct.
Torquay Village boasts a long WALE of 7.6-years by income and-8.19 years by area, with most of the specialty tenants made up of non-discretionary retailers.
“Some specialty tenants are currently paying turnover rent, and Coles are close to their turnover threshold so rental growth is imminent. This was an attraction to the purchaser,” added Burns.
“Good centre management has resulted in Torquay Village trading very well, and despite the challenging economic conditions, there are no vacancies and there’s been strong demand from businesses looking to move into any available specialty shops.”
The transaction comes around a year after IP Generation’s last Torquay investment sale. Also managed by Paul Burns in an off-market deal, the mixed-use multi-tenanted property in Baines Crescent sold for $40 million.
