‘Best trading’ Coles set for auction date
Booming trade and a population explosion are set to drive interest in a prime Coles supermarket investment on Melbourne’s outskirts that will be auctioned next month.
Investors will have the chance to own the freehold interest in the Coles at Drouin, 33km east of metropolitan Melbourne, when the property is put on the block as part of Burgess Rawson’s Portfolio Auction 133 on December 11.
With a reputation as one of the industry’s best trading supermarkets of its size, and a customer catchment that is predicted to almost double over the next two decades, agents say the asset virtually guarantees growth for investors.
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“Per square metre, this is the best trading supermarket that we know of,” Burgess Rawson director Raoul Holderhead says.
“We sold it three years ago for just over $10 million and since then store sales have skyrocketed and rent has increased. We’re now quoting circa $12-12.3 million, so the returns are obvious and significant in today’s market.”
Positioned on a commanding 4874sqm CBD corner site opposite a new McDonald’s, the property at 10 Hope St features a freestanding, full line supermarket plus ample on-site parking and integrated council parking.
Currently returning $634,780 per annum, the supermarket has a 20-year net lease to Coles, plus two 10-year options to 2043, with Coles paying all outgoings, including land tax.
Holderhead says Drouin is a major beneficiary of the growth of Melbourne’s traditional metropolitan area, with the local population expected to increase by 90% by 2041.
“The town is absolutely booming,” Holderhead says.
“Drouin is the Pakenham of 20 years ago. Melbourne has now caught up and moved past Pakenham, and many Pakenham residents are now moving to the Drouin and Warragul area.”
“Notably, it’s quite hilly out there and the town has grown incredibly quickly, but there aren’t many new commercial areas allocated, so current commercial properties are at an absolute premium.”
Burgess Rawson’s final Portfolio Auction of 2019 will be held in Crown Casino’s River Room at 11am on Wednesday, December 11.