Coles selling Melbourne and Brisbane suburban retail properties
Coles has put more than $70 million of suburban retail assets on the market in Melbourne and Brisbane.
The supermarket giant, which is set to be spun off from owner Wesfarmers into a separately listed company, is selling the Aurora Village neighbourhood centre in Melbourne’s north with expectations understood to be in excess of $40 million.
The recently completed mall has an unusual double supermarket anchor with a Coles supermarket competing with bitter rival Aldi in the same centre at 315A Harvest Home Road in Epping.
The Coles lease runs for 15 years with the Aldi lease running for 10 years. Combined, the supermarket chains take up 73 per cent of the 8284-square-metre centre alongside 16 specialty stores and a Coles Express Service Station across a 2.3-hectare site.
Aurora Village is being offered for sale by Mark Wizel and Justin Dowers of CBRE, with the agency’s figures showing national retail property sales up 30 per cent to $10.9 billion in the 12 months to June compared with the previous 12 months.
“There had been the perception in the market that online trade would significantly damage bricks and mortar assets and that sentiment, along with strong competition from the office market, was reflected in sales volumes last year,” Mr Wizel said.
“But centre managers have responded well to the challenge, primarily on the back of a new entertainment and services based tenancy mix, and consumers have shown a liking for the new mix, which is reflected, anecdotally, in higher foot traffic, and the steady improvement in retail trade figures,” he said.
In Kedron in inner Brisbane, Coles is selling a newly built freestanding supermarket and Liquorland outlet at 346 Gympie Road with a long-weighted average lease expiry of almost 15 years.
The property is being marketed by Savills Australia’s Peter Tyson, Ben Parkinson and Steven Lerche.
“The market has an ongoing shortage of new high-quality, freestanding supermarkets so we’re anticipating strong competition for Coles Kedron,” Mr Tyson said.
He said the supermarket’s high-exposure site on Gympie Road, a major arterial road, would be a key drawcard for investors along with its close proximity to the Brisbane CBD, just seven kilometres to the north.
Both Coles and Woolworths have been divesting their underlying real estate as the compete for dominance of the grocery market. Non-discretionary retail property has become highly sought after by investors because of its limited exposure to online retailing.
Earlier this month, Woolworths has sold a neighbourhood shopping centre in Perth’s outer northern suburbs for $26.925 million to a private investor, with the deal setting a new local yield benchmark of 5.8 per cent.
