Lalor supermarket set to go under the hammer

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AN entry-level Coles in Lalor is Victoria’s first single-tenanted Coles supermarket listed for sale this year, and is expected to generate interest in the sub-$10 million range.

The 2,050 sqm supermarket is located within the Lalor Plaza Shopping Centre, on the corner of McKimmies Road and Darebin Road, and returns $468,000 per annum net and includes on-site 148 parking spaces.

CBRE’s Justin Dowers, Joseph Du Rieu and Kevin Tong are marketing the asset, in conjunction with Gross Waddell’s Michael Gross and Alex Ham, on behalf of a private Melbourne family.

The supermarket goes to auction on Wednesday, 19th June.

Nearly $100 million of supermarket-anchored retail investment property has sold in the first half of 2019 in Victoria.

“This strong sales activity highlights the appeal of non-discretionary bricks and mortar retail property as a safe haven investment,” Dowers said.

Over the past two years, six single-tenanted Coles supermarkets have changed hands in the state, totalling more than $95 million. Of those properties, one sold for sub-$10 million – the 1,565 sqm Coles Ringwood East for $8.505 million, at a 5.26% yield.

Coles Ferntree Gully, of 2,212 sqm, sold for $10.5 million at a 3.98% yield, and Coles Clayton for $17.1 million at 2.58%, which helped bring down the average yield to 4.68%.

Property Price Yield GLA Rate/sqm GLA
Coles Clayton $17,100,000 2.58% 2,852 $5,996
Coles Ringwood East $8,505,000 5.26% 1,565 $5,435
Coles Drysdale $22,500,000 5.33% 3,775 $5,960
Coles Hamilton $23,000,000 5.20% 3,870 $5,943
Coles Ferntree Gully $10,500,000 3.98% 2,212 $4,747
Coles Warrnambool $14,000,000 5.74% 2,670 $5,243

Ham said the asset presented a unique opportunity for the buyer market to secure an entry level Coles supermarket at a very reasonable yield.

“With 10-year bonds and the five-year swap rate both dropping below 2% again in the past month, it makes a lot of sense for investors to be coming back into the retail investment property sector where they can use the benefit of leveraging equity to increase their buying capacity, coupled with tax saving depreciation benefits to boost returns,” he said.

Australian Property Journal