Torquay supermarket rings up $25m sale
WOOLWORTHS’ Torquay Central supermarket has underlined the market’s opinion of the asset class as “recession-proof” amid a massive sale.
The 7331sq m property has sold for $25.1m in a deal with a Melbourne-based private investor.
The transaction represents a 3.65 per cent yield for the 2980sq m freestanding store (including the adjoining land).
Stonebridge Property Group’s Justin Dowers, Kevin Tong and Philip Gartland negotiated the sale for the family who developed the supermarket in 2004.
It represented a record yield for a regional Victorian supermarket investment, the agents said.
“What became clear as soon as the marketing campaign for Woolworths Torquay Central commenced was the sentiment for this type of investment product had heightened, particularly due to an increase in supermarket sales performance further cementing these investments as the ‘go-to’ pandemic-proof investment, similar to that of certain logistics assets,” Mr Dowers said.
Supermarkets were deemed essential in lockdowns.
The campaign attracted offers from 14 buyers.
Mr Tong said all were from private investors.
“The most aggressive buyers that were identified when the bids were received represented high net worth individuals that were not necessarily common industry players,” he said.
“These buyers were individuals who had ongoing business interests outside of property and an increased appetite to shift a growing wealth pool (due to business profits) into a secure investment, like Woolworths Torquay Central.”
The sale also highlighted heightened interest in regional commercial property, particularly in coastal locations like Torquay.
The emergence of workfrom-home and seachange and tree-change trends due to COVID-19 has seen a drastic increase in population in regional areas.
The state government also brought forward a 50 per cent stamp duty discount on commercial property investments in regional Victoria, which Mr Dowers said were factors in bringing regional Victorian retail yields closer to those in metropolitan Melbourne.
The freestanding building on Bristol Road includes a BWS store and is let on a 20year term, expiring in 2024 plus options, with a passing net income of $916,029.