Coles' Torquay mall tipped to fetch nearly $40m
Supermarket giant Coles is selling more of its bricks and mortar after putting the Torquay Village neighbourhood shopping centre near Geelong on Victoria’s Surf Coast up for sale.
The Wesfarmers-owned retailer has been selling its property assets to invest in its struggling supermarket business, which saw its pre-tax earnings fall 13.5 per cent last financial year amid growing competition from the likes of Aldi and Costco and the imminent arrival in Australia of online giant Amazon.
Torquay Village, anchored by a full-line Coles supermarket and Liquorland along with 15 speciality shops, is the first Victorian mall to be offered for sale by Coles Group Property Development this year, after it listed the Bowral Coles supermarket and Coles-anchored Westmead Shopping Centre in NSW for sale in August.
Industry sources put the asking price for Torquay Village in the “high $30 millions”, which would reflect a sub 6 per cent yield. The two NSW properties are expected to sell for more than $60 million.
Last year, just two Coles-anchored Victorian neighbourhood shopping centres traded hands, with a group of UBS bankers selling the Springhill Shopping Centre in Cranbourne for $43.5 million on an initial yield of 5.5 per cent, and Coles selling its Coburg North Village for $38 million on an initial yield of 4.94 per cent.
Torquay Village is being offered for sale with a new 15-year lease to Coles and a weighted average lease expiry across the centre of more than 10 years through Stuart Taylor and Tom Noonan of JLL.
“The market is constrained of quality retail investment opportunities and the Victorian neighbourhood market remains the most tightly held in the country, a key factor that will drive investor interest in Torquay Village,” Mr Taylor said.
Coles bought the single-level Torquay mall in 2013 and redeveloped and extended it in 2015.
In August, Perth-based property fund manager Primewest bought the Coles-anchored Lisarow Plaza on the NSW Central Coast for $29.1 million on a yield of 6.2 per cent from private investors.
