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Market Insights

20.05.2019

Victorian supermarket sector heats up with Coles Lalor set to go under the hammer

Coles Lalor in Melbourne’s northern corridor has been listed for sale – representing the first single tenanted Coles supermarket to be offered for sale in Victoria this year.

Located within the Lalor Plaza Shopping Centre – on the corner of McKimmies and Darebin roads in Lalor – the 2,050sqm supermarket generates a net income of $468,000 and includes onsite parking for 148 vehicles.

CBRE’s Justin Dowers, Joseph Du Rieu and Kevin Tong, conjunctionally with Gross Waddell’s Michael Gross and Alex Ham, have been appointed to market the property for sale on behalf of a private Melbourne family. The retail asset is expected to generate interest sub-$10 million. 

Mr Dowers said the property would capitalise on strong investment appetite for secure retail assets.

“The first half of 2019 has drawn strong buyer demand for supermarket-anchored retail investment properties in Victoria, with close to $100 million worth of real estate transacting in this sector. This strong sales activity highlights the appeal of non-discretionary bricks and mortar retail property as a safe haven investment,” Mr Dowers said.

Over the past two years, six single tenanted Coles supermarkets have transacted in Victoria, totaling more than $95 million, with an average yield of 4.68%. Of those properties, one sold for sub-$10 million.

Mr Ham commented: “It is clear that this is a unique opportunity for the buyer market to secure an ‘entry level’ Coles supermarket at a very reasonable yield.

“The current market environment has seen investors look back towards good quality income producing real estate investments for secure returns on their money. With 10-year bonds and the five-year swap rate both dropping below 2% again in the past month, it makes a lot of sense for investors to be coming back into the retail investment property sector where they can use the benefit of leveraging equity to increase their buying capacity, coupled with tax saving depreciation benefits to boost returns.”

Coles Lalor is being offered for sale via public auction on Wednesday the 19th of June.

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