This article is from the Australian Property Journal archive
SUPERMARKET giant Coles has offloaded a 2018-built freestanding supermarket in Melbourne’s leafy inner-east suburb of Camberwell for $37 million, to Asian capital-backed investor Trident Capital Group.
The sale price represented a yield of 4.42%.
Coles recently also sold the 5,743 sqm Schofields Village neighbourhood centre in Sydney’s outer north-west for $53 million, on a 5.5% yield. Cap rates for smaller everyday needs types of centres, albeit having increased, remain low by historical standards.
Coles Middle Camberwell, at 725-727 Riversdale Road, includes a Liquorland with two ground-floor specialty shops, and three levels of undercover car parking for 209 vehicles, on a 4,425 sqm site with commercial 1 zoning.
“Our company’s comprehensive research and due diligence revealed that Coles Middle Camberwell is an excellent long-term investment opportunity. We believe that this asset is a once-in-a-generation opportunity, as blue-chip commercial properties like this are not readily available on the market,” said Chin He, managing partner of Trident Capital Group.
“We are confident that this asset will provide protection from short-term market downturns while delivering significant capital appreciation in the medium to long-term.”
According to Stonebridge Property Group selling agents Justin Dowers, Kevin Tong and Philip Gartland, the deal marks the second Victorian freestanding supermarket to transact in 2023 and reflects the limited supply available currently.
“Metropolitan freestanding supermarkets continue to be highly sought after given the rarity of these being offered to the market, especially in prime suburbs such as Camberwell,” Dowers said.
Deal-making has slowed down in the retail sector; transactions have slumped by more than 50% year-on-year according to The Data App. MSCI head of Pacific real assets research, Benjamin Martin-Henry has said price discovery has become more and more challenging for both buyers and sellers, resulting in restraint in the market.
Tong said capital flowing out of Asia has continued to grow in 2023, “especially off the back of the loosening of border in China and the booming economy which Singapore is currently witnessing”.
“For the larger supermarkets and shopping centres we are seeing the emergence of newer funds back by private Asian capital who are seeing better value in the larger-scale asset.
“The recent fall in the Australian dollar has made it more favourable for overseas investors to acquire properties in Australia, which has led to increased enquiry numbers over the last few weeks.”
