Eltham supermarket trades on 3.3pc yield
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.
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).
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.
Subscribe to our newsletter at the bottom of this page.
