Grocer tests the market
GROCERY giant Coles is tipped to reap about $25 million through the sale of its new supermarket at Drysdale.
The company’s property arm has listed the Murradoc Rd supermarket with JLL Victoria Retail Investments directors Stuart Taylor and Tom Noonan, who kicked off an expressions of interest campaign this month.
The store will be the first newly built Victorian freestanding supermarket offered to the market in five years.
Mr Taylor said price expectations were about $25 million.
Built last year, Coles Drysdale represents a rare opportunity for an investor to acquire the supermarket, which is wholly leased to Coles on a new 15-year lease with atgrade parking on title. The net annual income from the property is $1.26 million.
The complex includes a Liquorland outlet with a total lettable area of 3775sq m on a 1.055ha property in one of Geelong’s major urban growth areas.
Mr Taylor said trade area demographics measured household incomes at 7 per cent higher than the non-metro average, with retail expenditure forecast to grow at a rate of 5.1 per cent year on the back of 2.5 per cent expected annual population growth.
“Freestanding supermarket investments with a lease to a major supermarket operator are one of the most highly sought after and tightly held commodities in the commercial real estate sector,” Mr Taylor said.
“Private investors are particularly attracted to these assets due to the blue-chip lease covenant that Coles provides, secure long-term leases, large land holdings and minimal management requirements of the assets.
“Investors are flocking to non-discretionary or good and grocery based assets, with freestanding supermarket investments witnessing the strongest demand we have seen in recent times.”
Coles is the third supermarket to open in Drysdale, competing against Aldi and Woolworths. Woolworths also has a store in Curlewis.
The region’s last freestanding supermarket to sell was Woolworths at Highton, which sold to a private investor for $12.43 million last year.
JLL research shows 17 fullline supermarkets were traded in the past 10 years — 14 were freestanding but 10 were offered to the public market and only one was newly constructed.
The region’s retail industry has since seen a flurry of activity, with three shopping centres trading this year, including Leopold’s Gateway Plaza for $117 million, Bellarine Village for $36.5 million and Torquay Village — another Coles asset — for $35 million.