Coles sells West Ryde CBD supermarket with a leaseback for $23.85 million

Coles Group Property Developments has sold another supermarket with a leaseback, this time in Sydney’s West Ryde CBD.

A Victorian private investor is paying $23.85 million for the stratum-titled Coles West Ryde complex.

Based on the asset’s annual rental return ($1.395 million), the deal is being struck on a 5.85 per cent passing yield.

Coles offered the investment with an initial 12 year leaseback.

With options, it can stay until 2072.

Colliers International marketing agents James Wilson and Alex James-Elliott closed an expressions of interest campaign for the four year old asset in early December.

Coles West Ryde

On the ground floor of the eight-storey Central Square apartment complex at the corner of Betts Street and Chatham Road, Coles West Ryde contains 3985 square metres of area configured as a supermarket and Liquorland outlet.

The asset includes a 300-bay basement customer car park.

The lease agreement is structured so that store online sales form part of turnover rent calculations.

West Ryde is about 15 kilometres north west of the CBD and nine kilometres east of Parramatta.

…just the latest retail investment offloaded by the occupier

Capital recycling has formed a major part of Coles’ property strategies for years.

Six months ago it sold the Willowdale Shopping Centre in Sydney’s south west Leppington for $34.8 million while in late 2018, it banked $44 million disposing of Aurora Plaza in Melbourne’s north Epping.

Both these investments were anchored by Coles supermarkets and specialty retailers.

Last June Coles sold a two year old supermarket in the Gold Coast growth corridor of Yarrabilba, for $19.05 million.

In November, it reaped $35 million selling two pieces of Melbourne’s Boronia Mall – one with a leaseback to the supermarket (the other tenanted to Wesfarmers’ Kmart – until recently Coles’ sister brand).

Also last year, Coles sold a development site in Melbourne’s Gardenvale for $3.65 million and a Newcastle, NSW, block earmarked for Coles Mayfield, for $8.9 million.

The West Ryde investment (marked) is about 15 kilometres north west of the Sydney CBD.
The West Ryde asset includes 3985 square metres of lettable area and 300 basement car parks.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco