Coles Five Dock expected to fetch $25m-plus after coming up for sale

A Coles supermarket in Five Dock is on the market.

The first Coles supermarket in the Sydney metropolitan area to be publicly marketed in over two years has come up for sale in the inner west.

The Five Dock property is expected to be hotly contested from a mix of investor firms due to pent-up demand for pandemic proof assets.

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This level of interest is expected to see the Garfield Street asset fetch upwards of $25 million. CoreLogic reveals this sale price would deliver the owners, Macquarie Publications, a strong return on the $19.660 million the firm paid in 2017.

Coles has a lease until 2036 with an option until 2076.

Coles has a 20-year lease expiring in June 2036 on 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.

James Wilson and Alex James-Elliott of Colliers are handling the expressions of interest campaign of the first publicly listed supermarket since 2019.

“The last Sydney metropolitan supermarket brought to market was back in 2019. This lack of stock and current investor demand for strong performing supermarkets investments, means that investors demand has not yet been satisfied,” Mr James-Elliott said.

“We expect further opportunities for investors to secure metropolitan supermarkets in Sydney for 2021 to be limited.”

There is an apartment complex above the site.

Coles 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 is trading 29.2 per cent above Urbis benchmarks.

“Supermarket investment demand, specifically from the private investor market, coupled with the record low cost of debt is anticipated to drive purchaser engagement for this campaign,” Mr Wilson said.

“Investors will be attracted to the increased security afforded by the supermarkets 20 year lease, given the most recent ‘sale and lease back’ campaigns divested from Coles and Woolworths feature 10 year leases.”