Investors make a beeline for Woolworths stores in Melbourne

Investors make a beeline for Woolworths stores in Melbourne
Investors make a beeline for Woolworths stores in Melbourne

Melbourne’s appetite for Woolworths supermarket investments shows no signs of passing.

While the sale of Woolworths Glenroy for about $9.8 million was recently announced, an off-the-plan opportunity at Brunswick has just been listed.

Both were brought to the market through CBRE.

A group of local private investors has snapped up the freestanding Woolworths Glenroy for $9,750,000, reflecting a tight yield of around 4 percent.

Positioned in the northern suburb of Glenroy, the Woolworths supermarket has a remaining lease term of three years. 

The deal follows the sale of Woolworths Middle Brighton which transacted for $32,080,000, at a yield of 3.77 percent, in 2016.

CBRE’s Mark Wizel, Justin Dowers, Kevin Tong and Joseph Du Rieu steered the latest sale campaign. 

“The level of enquiry and interest that we experienced from buyers during the sales campaign was extremely positive, particularly given the short remaining lease term and the prospect of a decline in the turnover rent,” Wizel said.

Dowers said the rental agreement was based on a low base rental, with a significant proportion of the income derived from turnover rent. 

Although rival Coles Coburg North has impacted Woolworths Glenroy, Dowers said investors were ultimately attracted to the opportunity of owning a Woolworths supermarket only 16 km from the Melbourne CBD. 

Investors make a beeline for Woolworths stores in Melbourne

Meanwhile, the first Woolworths investment opportunity of 2017 has also been listed. The Woolworths Metro supermarket, Brunswick will be sold off-the-plan and is estimated for completion in 2018.

Pace Development Group are set to sell the ground floor Woolworths Metro Supermarket.

The Woolworths Metro store at 808-818 Sydney Road, Brunswick, will service 86 residential apartments on the seven upper levels of the property. 

CBRE’s Victorian Retail Investments team lead by Mark Wizel, Justin Dowers and Joseph Du Rieu are looking after the sales campaign.

Duane Vella, commercial development manager at Pace, said; “Given the 86 apartments that will be constructed above the supermarket are now sold out, we are confident investors will be eager to secure the retail component as a long term investment.”

Vella said Pace has managed the project in partnership with Woolworths from design to completion which should appeal to the buyer market.

Dowers said there is an increased demand for highly secure retail investment properties being sold off the plan. In the past 18 months the market has seen the sale of Woolworths Launceston, Woolworths North Caulfield and a Bunnings in Yarrawonga all off the plan.

“The pending sale of Woolworths Brunswick is the first metropolitan supermarket in Victoria to be offered to the market since Woolworths Middle Brighton was sold for a record yield of 3.77 percent by CBRE in June 2016.”  

The property will be sold by way of an international public expressions of interest, closing in late March 2017.

 

Tags: 
Woolworths Commercial Retail

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