Coles sells northern Gold Coast centre on 5.3pc yield

A COLES-anchored neighbourhood shopping centre, Ormeau Village, on the northern Gold Coast has sold for $37 million on a tight passing yield of 5.3%.

The 5,003sqm fully leased shopping centre is located on a 23,490sqm site just off the M1 Pacific Motorway in the Brisbane – Gold Coast growth corridor and features a full line 3,416sqm Coles supermarket and Liqourland plus 16 specialty shops and parking capacity for 255 vehicles.

Peter Tyson and Jon Tyson from Savills managed the sale via an expressions of interest campaign on behalf of Coles Group Property Developments, to an offshore private investor following.

“Ormeau Village transacted after attracting significant domestic and offshore buyer enquiry and bids from eight separate buyer groups,” said Peter Tyson, national director of retail investments at Savills.

“Bidders in the process included institutional and private investors as well as syndicate funds and totalled around $300million in unsatisfied capital still seeking a quality neighbourhood retail asset, preferred for its resilient qualities underwritten by daily-needs and essential service businesses.”

Coles Group developed the 5,003sqm GLA shopping centre in 2019, which has sold with a weighted average lease expiry of more than 8 years.

“Buyers were attracted to high quality of the development, together with the long WALE security of the income stream underwritten by a rare net lease to Coles for a new 10-year term which included potential benefits from forecast supermarket sales growth within a reasonable timeframe coupled with strong catchment fundamentals of affluent young family households in a high growth inter-city corridor between Brisbane and the Gold Coast,” said Peter Tyson.

Last year, a private investor snapped up fund manager Clarence Property’s nearby Woolworths-anchored Ormeau Marketplace for $34 million, on a yield of 5.24%.

While amidst numerous shopping centre sales in 2023, Mirvac has offloaded Stanhope Village in Sydney’s north west to investor Revelop for $158 million and Stockland sold its Gladstone asset in Queensland for $139 million to Melbourne-based fund manager Fawkner Property, on a yield of 7.4%.