Woolworths sells new Wadalba shopping centre for $26.15 million

The Wadalba asset returns annual rent of $1.49 million net of incentives. More than 95 per cent of the income is derived from vendor Woolworths Group.

Woolworths Group has sold a freestanding new supermarket with a leaseback in Wadalba, on New South Wales’ Central Coast.

The $26.15 million deal to a Melbourne investor was struck on a 5.7 per cent yield.

It is the first NSW retail transaction to be unconditionally exchanged in the current climate, according to Colliers International which said highlighted “the continued market strength for supermarket investment opportunities”.

Almost 2000 square metres of the 1.5 hectare site can still be developed.

Between Newcastle and Gosford, the 3905 square metre facility at 1 Figtree Boulevard is configured with a Woolworths supermarket, BWS (liquor store) and 203 onsite car parks.

It spreads over a 1.55 hectare block with a c1945 sqm pad site able to be developed (this land is zoned B2 Local Centre).

On the south east corner of Pacific Highway, Wadalba is just under 100 kilometres north of Sydney’s CBD.

James Wilson and Alex James-Elliott were the marketing agents.

“The current market is evolving quickly, and we are seeing a high level of interest in quality non-discretionary anchored assets by sophisticated high net worth investors,” Mr Wilson said.

“As such, Woolworths Wadalba experienced a high level of enquiry upon the formal launch of the campaign, with strong levels of activity across the data room and inspections.

“As the campaign continued, we experienced an increase in interest from long-term generational investors who pursued this asset type, due to its stable and secure characteristics and ability to both protect and grow wealth.

“The market is anticipating limited high-quality supermarket investment opportunities in the short to medium term; resulting in strong bidding from a large number of qualified high net worth investors”.

Mr Elliot added that purchasers are differentiating the March, 2020, COVID-19 driven economic jolt with the 2008 Global Financial Crisis.

“Purchasers have noted that the key difference between this market and the GFC, is that the gearing levels are far more sustainable and there are plenty of purchasers who are looking to take advantage of the market conditions.

“We attribute this heightened investor interest in the supermarket asset class due to their sustained essential role in Australia’s food supply during these uncertain times,” the broker added.

“This strength has been demonstrated throughout the Woolworths Wadalba campaign which has been seen as a secure investment underpinned by the long-term lease associated with the centre and Woolworths Group respectively.

“Centres anchored by supermarkets will continue to thrive throughout these uncertain times due to the dependence from the public on these stable establishments.”

Woolworths listed the Wadalba investment last year with three others – in Spring Farm, also in New South Wales, Keysborough, in Melbourne’s south east and in Northern Territory.

Last year, 10 deals for supermarket and freestanding retail investments were sealed in New South Wales.

The total value ($134 million) was up 25 per cent on 2018, the agents said.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco