Coles Coburg sells for $38 million on record yield through Savills

Coles Group Property Developments has sold its newly developed Coburg North Village shopping centre for $38 million on a fully leased record low yield of 4.94 per cent, to a Melbourne based private investor.

Savills agents Pat De Maria, Tom Forrest and Steven Lerche secured the sale that generated an unprecedented response with a record 300 enquiries.

There were 27 offers to purchase from a range of privates (local and interstate), off-shore and institutional investors with 18 offers at a sub 6 per cent yield.

"In this case the limited availability of quality retail investments and the high level of demand resulted in offers totaling an extraordinary $860 million and a genuine record sub 5 per cent yield for a fully leased neighborhood centre,’’ Mr De Maria said.

Anchored by a flagship Coles Supermarket, on the corner of Gaffney and Sussex streets, the property is fully leased and comprises a 6283 square metre GLA neighborhood centre on an 18,560 square metre site with four street frontages.

It was sold with a new 15 year lease to Coles and Liquorland and an estimated net income of $1.87 million per annum.

Mr Forrest said the key factor was the Coles Supermarket (incl Liquorland) lease.

"It was, without doubt, an unequivocal vote of confidence in the Coles brand,’’ Mr Forrest said.

Located just over nine kilometres north of Melbourne the 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 fully leased 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 also benefits from a large main trade area accommodating in excess of 46,100 residents which is forecast to grow to 52,050 or 12 per cent by 2026.