Coles buys supermarket on suburb’s biggest commercial block

Coles paid c$463,787 annual rent for the Bluff Road property.

Coles is buying a supermarket at the top of a small bayside retail strip from its landlord which has held since 1988.

Coles bought its Balaclava store on a record two per cent yield in March.

At 361-371 Bluff Road, Hampton, the 5274 square metre investment – also the suburb’s largest Commercial 1 zoned holding – with 101 car parks collected $17.2 million following a public marketing campaign last month.

Lakeside at The Entrance, one of two Coles anchored malls recently bought by Woolworths.

The result demonstrates a low 2.7 per cent net passing yield.

It also reflects a rate per sqm of building area of $10,437.

Stonebridge’s Justin Dowers and Kevin Tong acted for the vendor which paid $2.915m.

Coles withdrew a caveat as a tenant last week.

Development upside

The Hampton property was offered with a lease expiring in 2028 with a five year option.

Without that, it offers significant development upside – up to four floors, including residential could be considered, the agents said (story continues below).

The Hampton property includes 101 car parks.

Abutting Brighton, Hampton’s median two bedroom apartment price is $849,000, according to REA Group.

For three bedroom units, this is $1.353m.

The supermarket could also be extended, perhaps with a second level and/or an underground car park, agency sources add.

The deal comes six months since Coles outlaid a speculated c$100m for an outlet it occupies, and neighbouring shops, in Balaclava.

In that transaction, the result for the supermarket alone is speculated to reflect a two pc yield – the lowest in Australia yield for an asset of this type.

Last August meanwhile, rival Woolworths purchased an outlet it occupies in Hawthorn for $12.85m reflecting a c.3.3pc return.

It has also snared two malls Coles-anchored shopping centres in the past 12 months.

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Marc Pallisco

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