Coburg North Village listed on back of record retail year
The prized Coburg North Village shopping centre is on the market in the wake of a shopping centre investment spree in 2018 with sales in Victoria up 91 per cent, over 2017, to $1.82 billion.
The centre is the second Melbourne metropolitan shopping centre to be listed in as many weeks following that of Niddrie Central Shopping Centre last week.
The listing also follows Wesfarmers’ demerger of Coles – the brand holds the anchor lease within the centre – which has since announced a massive, circa $1 billion supply chain overhaul designed to lower costs and enhance business efficiencies.
The long-term Coles/Liquorland lease (expires 2031) accounts for more than 60 per cent of the the 6284 square metre centre’s WALE. The centre – one Melbourne’s strongest neighbourhood shopping centres – trades well into percentage rent returning more than $2.4 million per annum.
According to CBRE Director Australian Retail Investments, Mark Wizel, who is marketing the property with Victorian Director Retail Investments, Justin Dowers, the centre, which boasts the only supermarket over 2000 square metres in the main trade area, also offers significant future development upside with a highly exposed site of 18,560 square metres and substantial frontages to Gaffney and Sussex streets.
Located just over 11 kilometres north of Melbourne CBD, the relatively new neighbourhood centre opened in August 2015 and offers a state-of-the-art, flagship full-line ‘market style’ Coles Supermarket and Liquorland of 4175 square metres. The centre is further supported by 15 convenience based specialty retailers, including a medical centre and pharmacy, and provides sensor-activated on-grade parking for 303 vehicles.
The centre is among the first Coles anchored centres to be traded following the split from Wesfarmers. The newly demerged entity remains a giant with a 31 per cent share of the Australian supermarket sector including 800 plus supermarkets, nearly 900 liquor stores, 700 service stations, and 88 hotels.
Mr Dowers said investors looking for quality in a tight market were also acutely aware of the investment value provided by significant weighting towards non-discretionary based tenancies.
“Yields for retail centres have tightened considerably over the last couple of years and especially those with WALES dominated by supermarkets. The sale of Coles Clayton for $17 million on a record 2.57 per cent yield is a case in point,’’ he said.
Mr Dowers said Coburg Village also benefitted from a trade catchment of in excess of 46,000 residents which was forecast to grow to 52,050 by 2026 – an increase of 12 per cent for the period.
He said the growing catchment added to the centre’s substantial investment credentials including the prime inner-metropolitan location, the strong trading performance of Coles and the availability of tax depreciation benefits.
The property will be sold by Expressions of Interest closing at 3pm on Friday, March 22.