This article is from the Australian Property Journal archive
A STRATA-titled IGA property at Hoppers Crossing has sold to a local investor for $4,488,888.
CBRE agents Mark Wizel, Justin Dowers and Joseph Du Rieu negotiated the sale of the property, on the corner of Hogans Road and Deloraine Drive in Melbourne’s west.
The 750sqm IGA forms part of a retail complex also comprising four small specialty stores.
It has nine years remaining on its 15-year lease, currently returning a net income of $238,000 per annum, with sale price reflecting an initial yield of 5.3%.
Dowers said the sale was further evidence of the strength of demand from investors looking for secure retail investment properties.
“We were extremely pleased with the response from the buyer market, where historically properties of this nature with ‘strata titles’ are considered less appealing than true freestanding supermarkets,” he said. “Achieving an initial yield of 5.3% for an asset of this ilk is a testament to how the property was positioned in the market as the best retail investment offering sub-$5 million.”
Du Rieu said the market was viewing IGA-tenanted supermarkets as a highly attractive ‘entry level’ investment into the retail sector.
“Historically, focus has been on Coles- and Woolworths-leased supermarkets, however given the tightly-held nature of these properties, we are seeing a heightened level of demand for supermarket investments leased to independent grocers.
“We are continuing to see unrivalled levels of demand from buyers seeking to secure supermarket investments with many buyers priced out of the market for Woolworths- and Coles-leased assets, which is underpinning increased demand for IGA-tenanted supermarkets,” he added.
The transaction followed the sale of IGA Wantirna South earlier this year on a 5.5%.
Australian Property Journal
