This article is from the Australian Property Journal archive
ABOUT $20 million is expected for a standalone Woolworths supermarket in Victoria’s Torquay, where the major retailer recently splashed $5 million on a capital works program.
The freestanding building of 2,980 sqm includes a BWS store and is let on a 20 year term expiring late in 2024 with further options, with a passing net yearly income of $916,029.
Interested buyers will also be eyeing off development prospects down the track. It is located on the corner of Bristol Rd and Walker St, in the heart of Torquay town centre on a 7,331 sqm site with four street frontages and commercial 1 zoning.
There are 127 car parks on title and additional spaces on an adjacent council lot.
According to Stonebridge partner, Justin Dowers, who is marketing the property with Kevin Tong and Phil Gartland, Woolworths’ capital works program highlights its confidence and commitment to the location.
“Standalone supermarkets are rare and highly sought after by investors and have been over a long period of time and in many instances have produced very strong results.
“That has been due to some of the best investment credentials you will find in any commercial property asset including long leases, blue-chip tenants and high underlying land value.
“Daily needs tenants, like Woolworths, with an exceptional track record of performance, add another level of tenancy and rental income security which is particularly attractive in uncertain times.”
Recent sales of freestanding Woolworths-tenanted assets in Victoria have been struck at sub 5% yields. Only two of those have been struck in 2020, and both are tenanted by is Dan Murphy’s liquor arm, but traded at sharp yields – of 3.98%, for a Chirnside Park outlet, and 3.68% in the regional town of Wangaratta.
Higher up on the coast, last year the freestanding Woolworths and BWS in Lara sold for $21.55 million, on a yield of just below 6%, and the Woolworths-anchored Curlewis traded for about $17 million.
The Woolworths anchored Drysdale Village on sold for $13.9 million earlier this year on a passing yield of 6.72%.
Tong said the property provided significant scope for future mixed-use redevelopment given the central location opposite Taylor Park and only 300 metres from Torquay Beach.
“We are not simply talking about a recession-proof income stream from a blue chip tenant, but a property which also offers exceptional development prospects down the track at the gateway to the Great Ocean Road – one of Australia’s foremost tourist destinations,” Tong said.
He said the increasingly affluent locality was experiencing high levels of tourism and population growth, being an ideal location for sea-changers with the potential for significant acceleration as the working from home trend increased.
Prospective purchasers would benefit from a 20% reduction in stamp duty for commercial properties bought across regional Victoria, Tong said. The state government concession includes transactions entered into on or after 1st July this year and 1st July of 2021,
