WOOLIES ON SALE
KYABRAM Woolworths will go under the hammer at the 2018 Burgess and Rawson Portfolio Auction on December 12.
Burgess and Rawson is one of the largest commercial real estate agencies in Melbourne and its portfolio auction, to be held at Crown Casino, will see more than $50 million worth of assets up for sale.
Kyabram Woolworths is one of three major supermarkets up for grabs on the day, along with Hamilton Coles and Bright IGA.
In its information memorandum, Burgess and Rawson said freestanding supermarkets were some of the most sought after commercial properties in today’s market with Kyabram Woolworths net rent standing at $1.14million a year.
“Woolworths Kyabram is by far the most dominant supermarket in the region with sales for the three months ending October 2018 up 8 per cent year-on-year,” Burgess and Rawson said.
“Since redevelopment and extension in 2014, Woolworth Kyabram has continued on an upward trajectory.”
The building is 100 per cent leased to Woolworths until 2034 with options to 2079, making it a safe investment for potential buyers.
Freestanding supermarkets can range between $10 million to $30 million, depending on the town’s population and the building itself, and investors can expect anywhere from 3-5 per cent in investment yield.
For context, the Coles in Ferntree Gully in Victoria recently sold for $10.5million, despite it having a declining turnover performance.
The 3334sqm supermarket comes with a standalone BWS outlet under the one lease and the landlord’s income is based on $1.14m in rent plus turnover rent and any increases in outgoings.
Every five years the base rent increases to the average of the total of the base rent and percentage rent paid in the previous three years.
Kyabram Woolworths was originally developed in 1970 and Burgess and Rawson said after a full rebuild in 2014, expansion and refurbishment of the existing supermarket saw virtually a brand new store in most respects including a modern appearance and presentation.
The auction will start at 11am on December 12.