Dual supermarket investment fetches $39m
Private venture capitalist Looop has sold the bulk of an outskirt Melbourne shopping centre it delivered 10 years ago.
The Aldi and Coles plus 248 car parks at Kilmore Plaza found favour with a China based investor for $38.88 million – a 5.06 per cent net passing yield.
With 5264 square metres, the German supermarket is on the longest lease – 20 years.
Coles’ initial term lasts 10. Its tenancy also includes a Liquorland.
The site spans 1.86 hectare zoned Commercial 1 at the corner of Clarke and Sydney streets, with four access points.
Kilmore is about 70 kilometres north of Melbourne’s CBD.
Maiden retail investment
Looop developed Kilmore Plaza on the site of a freestanding Coles acquired over 20 years ago; it also includes a McDonald’s, Shell service station and two commercial tenancies occupied by Amplifon and Bakers Delight.
The supermarkets contribute 69pc to the income (continues below).
A 50pc stamp duty saving was available, the property qualifying for the temporary concession, being outside metropolitan Melbourne.
“The purchaser is a first-time entrant into the shopping centre market however this outcome reflects more than six years of engagement,” Stonebridge’s Kevin Tong, who brokered the deal with Justin Dowers, said.
“While Kilmore is a regional location, the strength of the underlying tenant covenants in Coles and Aldi was a key driver or purchaser interest, consistent with broader trends we are observing across the supermarket sector,” he added.
“We are also seeing that many offshore Asian buyers are less impacted by rising interest rates, with the ability to transact with low leverage or on an all-cash basis,” according to the executive.
“This provides a significant competitive advantage in tightly contested campaigns and continues to support yield compression for high-quality assets”.
Looop was established by the late Jakob Friedmann. It is now led by his son, Jeff, with offices in Cremorne and California.
Subscribe to our newsletter at the bottom of this page.
