Woolies under the hammer
INVESTMENT POTENTIAL PLUS WHEN KYABRAM WOOLWORTHS SITE IS AUCTIONED AT CROWN CASINO
Kyabram Woolworths will go under the hammer on Wednesday.
The auction, part of 2018 Burgess and Rawson Portfolio Auction, will see more than $50 million worth of assets up for sale.
Kyabram Woolworths is one of three major supermarkets for auction 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 $1.14 million a year.
‘‘Woolworths Kyabram is by far the most dominant supermarket in the region with sales for the three months ending October 2018 up eight per cent year-onyear,’’ Burgess and Rawson said.
‘‘Since re-development and extension in 2014, Woolworths 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 range between $10 million and $30 million, depending on the town’s population and the building itself and investors can expect anywhere from three to five per cent in investment yield.
For context, the Coles in Ferntree Gully recently sold for $10.5 million, despite it having a declining turnover performance.
The 3334 sq m supermarket comes with a standalone BWS outlet under the one lease and the landlord’s income is based on $1.14 million 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 developed in 1970 and Burgess and Rawson said after a full rebuild in 2014, expansion and refurbishment of the existing supermarket saw virtually a new store in most respects, including modern appearance and presentation.
Burgess and Rawson is one of the largest commercial real estate agencies in Melbourne and its portfolio auction, at Crown Casino, starts at 11 am Wednesday. For sale: