Coles Property Group is selling another neighbourhood shopping centre with a leaseback.
Aurora Village in Epping, in Melbourne’s north, is expected to sell for more $40 million, according to sources, which would reflect a passing yield of less than 6.25 per cent based on the annual rental return of more than $2.5 million.
The recently completed centre (pictured top, left and bottom) includes 8284 square metres of internal area and sits on a 2.3 hectare parcel zoned Town Centre.
Supermarkets Coles and Aldi occupy 73 per cent of the space. The balance is tenanted to 16 specialty stores including café Degani, and gym Anytime Fitness. A Coles Express service station is also on-site.
Epping, 20 kilometres north of the CBD, is a key growth suburb within Whittlesea, one of Australia’s fastest growing municipalities, marketing agency CBRE brokers Justin Dowers and Mark Wizel pointed out.
“The high percentage of income from the double supermarket anchor tenants creates a highly secure investment, however, it is the income growth potential that sets this centre apart,” Mr Dowers said.
“Coles Aurora Village has a number of elements that will promote income growth. The net lease structure to Coles and attainable percentage rent threshold will promote rental growth in the near future, while the Aldi lease provides annual rent increases and the conservative speciality tenant rental levels will maintain healthy growth rates as the centre continues to attract a disproportionate share of customers within the rapidly growing catchment area.
“The best is yet to come for this centre. There are a number of infrastructure projects occurring in addition to continued housing development in the dedicated catchment areas that will only make it more convenient for more customers to shop”.
The listing of 315A Harvest Home Road, Epping, comes two years after Coles sold a supermarket a little closer to the city in Melbourne’s North, in Coburg North, for around $38 million, a deal which reflected a 4.9 per cent yield.
CBRE Research reports that in the 12 months to June, national retail property sales totalled $10.9 billion – up 30 per cent on the previous 12 months.
Shopping centre sales comprised 62 per cent of the total sales (about $6.8 billion) – a rise of 86 per cent year-on-year, it said.