Woolworths picks up Coles-anchored mall

Woolworths recently acquired an Oakleigh car yard being rezoned for residential.

IP Generation has flipped a small Coles-backed shopping centre at Miranda, 16 months after picking it up as part of a $300 million portfolio from Paul Lederer.

Woolworths’ unsuccessful mixed-use proposal at 173 Burke Road, Glen Iris.

The Melbourne-based fund manager and developer, led by Chris Lock, is banking a significant capital gain – over 100 per cent, according to sources – from the c$68m sale to Woolworths.

The result is speculated to reflect a sub three per cent yield; the property has significant development upside.

JLL’s Nick Willis and Sam Hatcher were the agents.

Harvey Norman owns investments rented to rivals, including the Geraldton Homemaker Centre.

“Core land rich assets in major metropolitan markets remain tightly held,” Mr Willis said, while not commenting about buyer or price.

“Despite current market conditions there remains a growing weight of capital looking to acquire these assets, in particular those that are grocery anchored and/or provide future mixed use potential,” he added.

While uncommon, there are cases of retailers being landlord to a rival, like Woolworths will be to Coles at Miranda; Harvey Norman for example recently snapped up homemaker centres in Geraldton and Melbourne, at Taylors Lakes, part-rented to competitors.

Site history, future

On 1.15 hectares zoned B3 – which in the Sutherland shire allows for residential – the Coles anchored Miranda property, 4-6 Wandella Road, is surrounded to three sides by apartments.

It also fronts Seymour Shaw Park tennis courts.

The mall was developed in 1979 and last renovated four years ago (story continues below).

Charter Hall purchased a Miranda Tesla dealership in February.

With 5081 square metres, there are 16 specialty stores.

There are also 181 car parks.

Sydney-based Mr Lederer, who founded Primo Smallgoods and co-owns the Western Sydney Wanderers, picked it up in 1995.

Four years ago, it was rebranded from Parkside Plaza to Lederer Miranda, a name IP Generation kept.

Woolworths’ plans are unknown – it is likely to occupy the property after Coles’ tenancy expires in 2030 – but this could be as part of a mixed-use development with medium density residential.

In Melbourne, the group recently – but unsuccessfully – proposed a project just like that, on a similar size (1.1ha) block, at Glen Iris.

In July, we reported Woolworths’ development arm, Fabcot, paid over $37m for an amalgamation of Oakleigh sites – all up just over two hectares – including the Garry and Warren Smith car dealership, which is in the process of being rezoned to allow for residential and commercial.

Miranda is about 25 kilometres south of Sydney.

In February, Charter Hall outlaid nearly $30m – reflecting a four per cent yield – for a Tesla dealership in the suburb.

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Marc Pallisco

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