Eltham supermarket trades on 3.3pc yield

The vendors paid Woolworths $11.05 million for the then-new Eltham complex in 2001.

The founders of ASX-listed Hansen Technologies have banked $35 million – more than triple what they paid Woolworths in 2001 – for a supermarket in Eltham, north east of Melbourne.

Woolworths Hawthorn (shaded) was recently listed for sale.

The price for the modernised centre on 9047 square metres covering 7-21 Arthur Street and 22 Pryor reflects a low 3.3 per cent net yield.

Fifteen offers were received following an expressions of interest campaign which closed 10 days ago; the buyer is a private investor.

Stonebridge Property Group’s Justin Dowers and Kevin Tong with Fitzroys’ David Bourke, Chris James and Shawn Luo represented the vendor, Kymarnam Pty Ptd, co-directed by Hansen Technologies chief executive officer, Andrew Hansen, which acquired the then-new property for $11.051m in May, 2001.

Another low yield

With 3744 sqm of area, the freestanding building underwent a major refurbishment in 2017.

The Commercial 1 zoned site contains 284 car parks, some undercover.

Woolworths is on a lease expiring in 2027 however with options it can stay until 2050 (story continues below).

Woolworths Balwyn (shaded) traded for $45.7 million last November.

Eltham is 20 kilometres from the CBD.

“Given we had 15 offers on the property and achieved a yield at this level, it would indicate that although buyers may be anticipating a higher interest rate environment, there is greater concern of holding cash when entering into a higher inflationary period,” Mr Dowers said.

The deal comes five months since the Liuzzi family outlaid $45.7m – 20pc over expectation, reflecting a 2.99pc passing yield – for the Woolworths Balwyn complex on 4705 sqm at 383 Whitehorse Rd, 10km east of town.

Not long earlier a Blackburn South supermarket also rented to Woolworths, on a 7298 sqm parcel, traded to Westrent Properties’ Emmanuel Zahra for $29.3m – a 2.43pc return.

The tightest yield for an investment of this type – 1.9pc – was also recorded last year when the Coles Hawthorn on Glenferrie Rd exchanged for $24.5m.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.