Hawthorn Coles sells at record low yield

Woolworths Balwyn (shaded), on 4705 square metres, goes to auction next Friday.

A syndicate has sold a Coles backed supermarket, in Hawthorn, after 37 years.

The $24.5 million price for 689-699 Glenferrie Road reflects a 1.9 per cent net passing yield – a national record for an asset of this type.

The deal comes two weeks since we reported a Woolworths backed Blackburn South asset traded for $29.3m – a 2.36pc return.

Woolworths Brighton traded at a 3.77 per cent yield in 2016.

The market is set to be tested again with the auction next Friday of another leafy east suburb Woolworths – on a 4705 square metre Commercial 1 zoned block – at 383 Whitehorse Rd, Balwyn.

Coles Hawthorn

On the south west corner of Linda Crescent, with rear access to Grace Street, the single storey Hawthorn building spreads over the entire 1451 sqm site.

Coles is on a rental agreement expiring in more than 20 years, with options.

The vendor includes members of the Kiel family who in 2018 formed part of a syndicate which banked $14.1m from an Adairs backed showroom in Bridge Rd, Richmond (story continues below).

In 2016, businessman and horse racing identity Ken Biddick and his wife Catherine acquired a Woolworths supermarket in Brighton for $32.08m – a price which reflected a 3.77 pc yield.

Pricey deals

Emmetts Real Estate’s Charles Emmett, who brokered the off-market deal for 689-699 Glenferrie Rd to a private investor declined to comment.

In March, the agency sold nearby 655-657 Glenferrie Rd – which like the Coles property, forms part of Hawthorn’s Grace Park Estate – for $11.5m or 15 per cent over guide.

Ten parties contested despite the long-time tenant, Westpac, being set to vacate.

Last month, two adjoining shops at 180-182 Glenferrie Rd, Malvern, traded for $11m, reflecting a 2.37pc initial passing yield.

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Marc Pallisco

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