This article is from the Australian Property Journal archive
COLES has put yet another of its supermarkets up for sale ahead of its $3.9 billion spin-off from parent company Wesfarmers, with a newly built Kedron asset in Brisbane’s inner suburbs hitting the market as a trophy investment.
Savills agents Peter Tyson, Ben Parkinson and Steven Lerche are managing the international expressions-of-interest campaign, with enquiry expected from interstate and offshore buying groups.
Tyson said the market has an ongoing shortage of new high quality, freestanding supermarkets, adding that “without a doubt, this supermarket is the best retail offering ever to come to the Brisbane market and buyers will recognise it as a genuine once-in-a-lifetime trophy investment”.
It has a long-term WALE of 14.73 years underpinned by a 15-year net lease to Coles, and with a total income of almost $1.85 million. Coles and Coles Express are providing new long-term leases accounting for 98% of the tenancy area.
Tyson said the asset provided unrivalled income security, with strong supermarket and liquor sales projected.
Coles has just posted strong growth of 5% in total sales for the September quarter, to $9.838 billion. Supermarkets saw a 5.8% uplift in sales over the period to $7.657 billion, while liquor was up 2.1% and convenience by 2.5%.
Tyson said new, long-leased freestanding supermarkets are a highly desired investment-grade asset type, while the Kedron supermarket’s high-exposure site was a valuable drawcard with more than 31 million cars passing along Gympie Road each year.
“Coles acquired and consolidated the site over an extended period of time and positioned the development to capitalise on the city’s growing population, which is underpinned by Brisbane’s ongoing infrastructure investment boom, as well as rising interstate and offshore migration,” Tyson said.
Coles has also just put Aurora Village neighbourhood centre in Melbourne’s northern suburb of Epping to the market. Dual-anchored by Coles and Aldi supermarkets, the 23,265 sqm property comprises two titles, including the 21,880 sqm shopping centre site and a 1,385 square metre Coles Express Service Station site, and returns more than $2.5 million per annum.
Also currently listed 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, it 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.
Amid an e-commerce and logistics revolution, Coles Online achieved over 30% sales growth over the September quarter and is on track to surpass $1 billion of sales for the current financial year.
It is looking to take the number of Click & Collect locations to more than 1,000 across, and has just struck an agreement with German group Witron to develop two automated distribution centres over the next five years, as rival Woolworths nears the opening of a $350 million centre in Melbourne’s eastern suburb in 2019.
Coles will also be introducing a new smaller-format “Coles Local” that will be rolled out over the next few months, with a maiden site in Melbourne’s Surrey Hills.
Australian Property Journal
