$12M PRICE IS RIGHT FOR HIGHTON WOOLIES

MELBOURNE investors yes- terday paid more than $12 million for one of Geelong’s biggest stand-alone supermarket buildings.

The freehold for the Highton Village Woolworths at 12 Belle Vue Ave sold under thee hammer for $12.43 million.

Darcy Jarman agent Tim Darcy said it was a great show of faith in the Geelong region.

“We were quoting $11 million plus, and we ended up having a reserve around the mid-$11 million range,” he said.

“It was purchased by a private investor based in Melbourne. They were drawn to the opportunity because of the covenant and because of its geographic location.

“We had four parties bidding for it. There were plenty more that were there to buy, but when it got to the pointy end of the equation, it came down to four.”

The 6854sq m property is leased to Woolworths until 2034, with options until 2074, netting $581,000 a year for its new owners at a 4.67 per cent yield.

“For regional supermarkets, that’s staggering — and from people that don’t live in Geelong, or spend time in Geelong, and don’t know it at all that are prepared to invest $12.43 million,” Mr Darcy said.

“Stand-alone supermarkets are very much soughtafter, they don’t sell in numbers like that.

“I’d be prepared to say it’s a record yield for a regional A-grade investment.”

The scarcity of the style of investment helped drive the price, Mr Darcy said.

“There hasn’t been an abundance of them, that’s why this one performed so well,” he said.

“We’ve had a couple of shopping centres sell, but not stand-alone supermarkets, that’s why they’re so popular.”

The freehold of a standalone building was more attractive to investors than the strata management of shopping centre complexes, Mr Darcy said.

The Highton Woolworths isn’t the only stand-alone centre to enter the market this year, as Darcy Jarman will also auction the St Leonards IGA next month.

Price expectations are more than $5 million, for its $286,609 per annum income and 15-year lease.

Mr Darcy said the coastal supermarket investment would attract a different sort of buyer, and more fierce competition, given the price point.

“They’re different products, but there’s more scope for it to fit into people’s price bracket,” he said.

Pictures: PETER RISTEVSKI AUCTION CROWD: Shoppers gather to watch the Highton Woolworths store go under the hammer yesterday, and (inset) the Melbourne buyers who paid $12 million for the property.