This article is from the Australian Property Journal archive
WESTERN Australia’s first freestanding full-service supermarket offering in over 10 years has been snapped up by an east coast private investor, after attracting over 290 enquiries, for $31.95 million on a net yield of 5.29%.
Coles Group Property Developments Ltd (CGPD) sold the property located at 353-361 High Rd Parkwood just 10kms south-east of the Perth CBD.
Occupying a 1.983-hectare site, the property is improved by a 5,759 sqm retail centre including a 4,543 sqm Coles supermarket, a 1,046 sqm First Choice Liquor store, a 170 sqm government-owned TAB, as well as approximately 334 at-grade car parking bays.
It is 100% occupied, the Coles lease has a new 15-year lease with four 10-year options and the First Choice Liquor lease was for 10 years with eight five-year options.
The sale was handled by exclusively by Savills’ Chris Ireland, Chas Moore, Barney Dear, Steven Lerche and Pat de Maria.
Ireland said the sale of Coles Riverton is the first example of a freestanding, full-service supermarket to hit the WA market in over 10 years.
“The distinct lack of stock in the premium-grade retail sector in WA ensured the asset was well received by a buyer pool that has previously been starved for high-quality offerings,” he added.
Ireland said the offering received more than 290 enquiries with significant east and west coast interest.
“Fourteen offers were received from onshore and offshore buyers, and nine offers went unconditional before an interstate buyer sealed the deal with a quick exchange,” he continued.
According to Savills research, the WA retail investment market continues to be one of the most tightly held markets in Australia, with the retail asset class remaining the most popular among investors. Investor demand remains strong, dominated by private investors, both local and eastern-state based.
Lerche said the sale price reflects is a solid yield for the Perth retail market, adding that Savills had a number of other sales to report on in the sector, following a strong end to 2017, including the sale of the Coles supermarket in Pacific Pines on the Gold Coast via auction in July, which achieved a price in excess of $30million at a record low yield of 4.63%.
“We have also sold Coles Coffs Harbour for $34 million on a passing yield of 5.54%and another NSW Coles supermarket that sold for close to $27 million at a circa 5.2% yield, demonstrating the strong buyer demand for Coles-leased assets,” Lerche concluded.
Australian Property Journal
