Leongatha Woolworths on the market
A well-known Melbourne investor has listed its standalone Woolworths Leongatha supermarket into a stock starved market for an investor favourite that has seen only three sales in Victoria this year.
Located at 1-7 Peart Street, the 3143 square metre (GLA) store sits on a 3267 square metre site which includes at grade parking for 142 car parks. The supermarket will be sold with nine years of a 20 year lease to Woolworths remaining at a current income of $699,000 per annum net.
CBRE head of Premium Property Portfolio Auctions (PPPA), Joseph Du Rieu, who is managing the sale with Mark Wizel and Justin Dowers, said the strongly performing supermarket was the first in more than two years to be offered with turnover rent in Victoria.
“This time last year we had seen the sale of six freestanding supermarkets and this year only three, but none of those offered turnover rent and that is going to drive further interest is what is an increasingly hungry market for this type of product,’’ Mr Du Rieu said.
He said there were a number of factors driving demand for standalone supermarkets including the 100% non- discretionary spend tenancy profile, blue chip tenants, long leases, and sites with strong underlying land value and future development potential.
“What is adding to that potent mix of investment credentials is the increasing competition for property over other, perhaps more volatile, asset classes, at this point in time.
“Those property assets, such as supermarkets, that are regarded as defensive investments, are attracting that much more attention,’’ Mr Du Rieu said.
Mr Dowers said the lack of stock would also contribute to the attention Woolworths Leongatha was likely to attract as would the lower value of the Australian dollar.
“Off-shore investors have shown a greater degree of interest in retail assets of late and the fact that the Australian dollar is now at a point which provides those off-shore investors, or those sourcing their funds from off-shore, with an effective discount provides an additional level of incentive.
“Quality assets are never in abundance and especially at the moment as recent sales history indicates with just three supermarkets having sold in Victoria this year,’’ Mr Dowers said.
Recent standalone supermarket sales:
Mr Du Rieu said the property also benefitted from Leongatha’s status as the principal town in the region.
Leongatha is the largest town within the South Gippsland Shire with a population currently around 6000 and forecast to grow to 8038 by 2036*. According to population experts .id, the population of the Shire is estimated at 29,780 in 2019 and forecast to grow to 35,982 by 2036.
The property will be auctioned at CBRE’s next Premium Portfolio Property Auction on Thursday, October 10.