A local syndicate backed by Vietnamese capital has paid $13.77 million for the Coles supermarket, in Lalor’s May Road.
On 3365 square metres abutting Peter Lalor Walk, within a retail strip retail precinct also incorporating Station Street, between Thomastown and Lalor train stations, the property was offloaded by a local family which paid $1.445m in 1982.
Coles is on a lease expiring in 2028 but with options can stay for a further 20 years.
Based on the present net rent ($413,000), the sale price reflects a yield of just under three per cent.
The sale comes three years since a Chinese investor paid Black Swan founders the Saristavros family $7.38m for a strata-titled, Coles-backed supermarket, occupying about 40pc of the nearby Lalor Plaza.
In a show of how fast yields for this asset class have tightened in recent years, that price reflected a 6.3pc net passing return.
Only private investors bid: agents
All 11 offers for Coles Lalor were from private investors, Mr Tong said.
“These buyers are individuals that had ongoing business interests outside of property and an increased appetite to shift a growing wealth pool into a secure investment like Coles Lalor,” he added.
Since the opening of international borders in February, Asia-based private investors have resumed their interest for Australian commercial real estate, according to the executive, with demand coming from China, Hong Kong and Singapore.
“The eventual purchaser [of May Road] was a group of private investors with capital sources coming out of Vietnam, who were attracted to the long-term income security of Coles and the upside potential,” Mr Tong said (story continues below).
Coles, 41-71 May Road, Lalor
At 41-71 May Road, Lalor, the supermarket investment contains 2873 sqm of lettable area
The Commercial 1 zoned site has development upside – namely, the airspace can make way for, amongst other things, apartments, offices or a hotel.
Coles’ tenancy includes a Liquorland.
The rent it pays – $143.75 per sqm – was marketed as being “significantly” below the market rate.
“The sale of Coles Lalor shows again that investors are seeing more value to freestanding supermarkets than just a pure income investors,” Mr Dowers said.
“Metropolitan Melbourne freestanding supermarkets sit on some of the most strategic and valuable land parcels in [the city], which is a factor that we are now seeing consistently priced in,” he added.
Recent sale examples include the Coles Hawthorn, on 1451 sqm, which was acquired by Lido Cinemas owner Eddie Tamir for $24.5m, reflecting a 1.9.c yield, and Woolworths Balwyn – covering a 4705 sqm site, that traded to the Liuzzi family for $45.7m (a 2.99pc return).
Lalor is about 18 kilometres north of Melbourne.
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