Coles offload Gold Coast shopping centre with a leaseback

Ormeau Village occupies a 2.55 hectare site.

Coles Property Developments has offloaded the four year old Ormeau Village with a leaseback.

The $37 million deal to an offshore investor reflects a 5.3 per cent yield.

The sale comes a fortnight since we reported the retailer was outlaying $100m for a supermarket it occupied, and neighbouring shops, in Melbourne’s inner south east Balaclava.

Last month, meanwhile, Coles divested a retail investment it anchored at Victor Harbour, 80 kilometres south east of Adelaide, for $33.5m – a low 4.12pc return.

Like Ormeau, the vendor offered that mall with a 10 year leaseback.

Savills’ Peter Tyson and Jon Tyson were the agents.

Ormeau Village

On 2.35 hectares at 37-59 Eggersdorf Road, two blocks east of the Pacific Highway, Ormeau Village contains 5003 square metres of gross lettable area, the bulk (3416 sqm) being the supermarket and Liquorland.

Including 16 specialty tenancies, the Weighted Average Lease Expiry by income is 8.18 years.

There are also c228 car parks, mostly under shade sails, and an undeveloped tract beside a loading bay.

The incoming owner will be able to claim depreciation benefits too (story continues below).

“Ormeau Village transacted after attracting significant domestic and offshore buyer enquiry and bids from eight…groups,” Peter Tyson said.

Amongst the suitors, according to the executive, were institutions, syndicates and private investors.

“Buyers were attracted to…a rare net lease to Coles for a new 10 year term which included potential benefits from forecast supermarket sales growth within a reasonable timeframe coupled with strong catchment fundamentals of affluent family households in a high growth inter-city corridor between Brisbane and the Gold Coast,” Jon Tyson added.

Every tenant is either a non-discretionary retailer or essential services provider, including a medical centre, dentist and pharmacy.

The complex’s catchment is expected to balloon by 34,570 by 2036, they said.

The deal comes six months since Lennox Head based fund manager Clarence Property sold the nearby Ormeau Marketplace for $34m reflecting a 5.14pc yield.

Developed in 2015, and formerly known as Ormeau Shopping Centre, that asset contains 4718 sqm anchored to Woolworths, which is on a lease expiring in 2035.

Ormeau forms part of a growth corridor 35km north west of Surfers Paradise and 45km south east of Brisbane.

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Marc Pallisco

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