Charter Hall pays over $25m for Coles Five Dock

Real Estate

Charter Hall has purchased 4-12 Garfield St, Five Dock.

One of Australia’s largest property investors has splashed over $25 million on a Coles Supermarket in Five Dock.

The Garfield St property was purchased by Charter Hall’s Direct Long WALE Fund for $25.9 million following a competitive expressions of interest campaign.

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This is a strong return for the current owner, Macquarie Publications, who only paid $19.66 million in 2017, CoreLogic reveals.

Real Estate

The property is home to a Coles and a restaurant.

Charter Hall’s Direct Long WALE Fund has a portfolio valuation of over $240 million. A number of petrol stations, retail outlets, Bunnings and Woolworths stores are owned by the firm.

Various Charter Hall funds have been on a property spending spree during the pandemic including taking a 50 per cent stake in the Sydney flagship David Hones store and acquiring part of Myer’s Bourke Street Mall. It also purchased a 8.4ha site at the Brisbane Airport.

Colliers national director (NSW) of retail investment services James Wilson said the Five Dock Coles received offers from 11 buyers during the strong campaign.

“We are experiencing unprecedented demand from investors seeking to deploy capital into ‘pandemic-proof’ assets with strong catchment drivers, long-term income growth and covenant security,” he said.

“The strong result achieved for Coles Five Dock despite Sydney being under lockdown conditions reflects the growing demand of institutional and private capital targeting this asset class.”

Colliers’ Alex James-Elliot said the campaign received the interested buyers were a mix of local, interstate and international investors.

“They were attracted to not only the asset’s property fundamentals, but also the extremely rare nature of the lease which provided the ability to capture future income growth via percentage rent,” he said.

Real Estate

Coles has a 20-year lease on the site.

Coles had a 20-year lease expiring in June 2036 on the 3550sqm site with the four, ten-year options to 2076. It is positioned along the retail strip of Great North Road, and is forecast to benefit from the proposed Sydney West Metro Five Dock Station opening in 2030.

The supermarket is supported by a single restaurant across 3550sqm with 163 basement car spaces on title. The offering is the only full scale supermarket in the surrounding district and was trading 29.2 per cent above Urbis benchmarks.