Coles lists Boronia retail assets worth $30 million-plus

Coles can expect to bank more than $30 million selling two neighbouring strata titled retail assets within the Boronia Mall, in Melbourne’s east.

One of the spaces, configured as a supermarket, is being offered with a leaseback expiring in 2031.

The other strata property is rented until 2025 to department store K Mart, a Wesfarmers company.

Until a demerger last November, Coles was a Wesfarmers entity.

CBRE is marketing the Boronia Mall investments (pictured, top).

Coles recently sold Aurora Plaza in Melbourne’s Epping for a speculated price of more than $44 million.

Fully leased, they contain about 10,000 square metres of area and return annual rent of $2.05 million.

Boronia Mall and an adjacent shopping centre, Boronia Central, are designated as Major Activity Centre’s in the state government’s Plan Melbourne metropolitan planning strategy.

Both complexes provide undercover and at-grade parking for customers.

“Significant upgrade works have also been recently completed with new lifts, travellators, plant, and carpark works, including a smart carpark system, to improve the shopping experience,” agent Mark Wizel said.

“The beauty of this centre is it has the benefit of two major national anchor tenants, but without the exposure to specialty income.

“The security and overall quality of the income is absolutely A-plus, which is further underwritten by a strong track record of high trading performance

“Non-discretionary spend tenants, like Coles, with an exceptional track record of performance, add another level of tenancy security which is particularly attractive in uncertain times”.

Mr Wizel said the offerings also offer strong underlying land value with major long-term development upside.

Boronia is about 32 kilometres from the city.

Colleague Justin Dowers said “the fact that there was a lot of offshore and local money looking for a home in property, at a time of global economic uncertainty, and that quality assets were in short supply, would ensure the asset attracted a strong field of suitors”.

The agent added that both tenants were performing above industry benchmarks, showing year on year growth, while Kmart was `significantly under-rented’ reflecting a rate of $108 per sqm net.

“Like most parts of Melbourne, Boronia has seen strong population growth and will continue to benefit from that growth, providing retailers and other businesses with confidence in the region’s long term prospects.

“Both Coles and Kmart are showing strong performance indicators and it is anticipated that both tenants will be paying the landlord percentage rent in the near future,’’ Mr Dowers said.

Continued sell-down for Coles

The Boronia listings come a month after we reported that Coles was selling a former used car yard on a 1123 square metre plot at 203-207 Nepean Highway, Gardenvale, about 10 kilometres south of the Melbourne CBD.

In July, we reported that Coles disposed of a two year old supermarket on a leaseback in Yarrabilba, midway between Brisbane and the Gold Coast,

Last December, we reported it offloaded a near-new shopping centre, Aurora Village, 20 kilometres north of Melbourne, for more than $44 million. Coles is an anchor tenant at the 9677 sqm Epping centre, on a 2.3 hectare Town Centre zoned block.

The Coles small concept store in Union Road, Surrey Hills.

A month earlier, we reported it acquired an asset – in the Union Road retail strip, in Melbourne’s Surrey Hills – which it occupies as a small-format store (artist’s impression, above).

Plenty of landlords with assets leased to Coles have sold, too

Last month we reported that two Coles supermarkets within the Northcote Plaza, in Melbourne’s inner-north, sold as part of a $60 million portfolio.

Two months ago we reported, that Newmark Capital was paying Stockland about $64 million for the Coles-anchored Tooronga Village shopping centre in Hawthorn East, about seven kilometres east of Melbourne.

In June, the Saristavros family – which founded Black Swan Dips – sold a strata titled portion of the Lalor Plaza, leased to Coles, for $7.4 million – as we reported here.

Also in Melbourne’s north, but a little closer to the city, the Coburg North Village shopping centre sold to Sydney-based investor Isaac Solomon for about $47 million in April.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of