This article is from the Australian Property Journal archive
A COLES in Melbourne’s northern suburbs has changed hands on a yield of 2.98%, continuing a run of tight results for Melbourne supermarkets.
The 2,798 sqm freestanding Coles Lalor sold for $13,768,888, a lower price tag than some of its counterparts that have traded with since late last year, but at a comparable return. It is on 3,365 sqm May Road parcel with commercial 1 zoning and includes a Liquorland, and is leased on a 10-year term until 2028 with multiple five-year options and a passing net yearly income of $413,000.
Stonebridge Property Group agents Justin Dowers, Kevin Tong and Rorey James acted as agents on behalf of a private family that owned the asset for over 30 years. The property was sold to a Melbourne-based private investor with capital sources coming out of Vietnam.
“The sale of Coles Lalor shows again that investors are seeing more value to freestanding supermarkets than just a pure income investment. Metropolitan Melbourne freestanding supermarkets sit on some of the most strategic and valuable land parcels in Melbourne, which is a factor that we are now seeing consistently priced in,” Dowers said.
Private investors made up all 11 of the offers on the property. Tong said the most aggressive buyers were high net worth individuals that were “not necessarily common industry players”.
“These buyers were individuals that had ongoing business interests outside of property and an increased appetite to shift a growing wealth pool (due to business profits) into a secure investment like Coles Lalor.”
Over 66 groups requested the due diligence information.
The sale follows the first major supermarket sales campaign in Victoria for the year, for Woolworths Eltham. On a larger land site of 9,044 sqm, the full-line 3,744 sqm supermarket sold to a Melbourne-based investor for $35 million on a 3.3% yield.
Coles Local Glenferrie, in the eastern suburbs, sold late last year for $24.5 million, on a record eye-watering yield of 1.90%, while a freestanding Woolworths in Balwyn sold for $45.7 million and under the 3% mark, following another Woolworths in Blackburn South trading for $29.3 million, at 2.46%.
Close to the Glenferrie Coles Local, a 1,827 sqm Woolworths within a retail complex is currently on the market, returning $424,000 each year.
