Coles rides retail wave to $35m Torquay Village sale
Grocery giant Coles got the opposite of their ‘down, down’ campaign as their Torquay Village Shopping Centre sold for $35 million.
Toorak-based investor David Feldman reportedly snapped up the 1.4ha land parcel in the heart of Torquay’s town centre.
JLL Victoria Retail Investment directors Stuart Taylor and Tom Noonan sold the centre on behalf of Coles Group Property Development Ltd with an initial yield of 5.89%.
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Noonan says there was really strong interest with seven bids and nearly 150 inquiries throughout the campaign.
“The investor base was really attracted to the Geelong and Torquay growth story and what was a very high quality asset,” he says.
“There was a mix of private investors, syndicators and offshore buyers.”
The centre is anchored by a full-line supermarket and Liquorland and accompanied by 15 speciality shops.
Taylor says retail assets with strong lease covenants such as Coles continue to be hotly contested.
“These assets attract investors as they are considered to be low risk, defensive assets, offering strong security of income,” he says.
This was the first Victorian neighbourhood transaction this year and the first Coles-anchored neighbourhood shopping centre to trade hands since Cole’s Coburg Village sold for $37.98 million in 2016.
In 2017, Noonan says a total of $145.3 million neighbourhood transactions were recorded in Victoria with 60% being purchased by local investors.
“(This shows) a trend shift away from offshore capital being the dominant buyer group,” he says.
Coles Group Property Developments acquired the 1.4ha Bristol Rd centre in 2012 — paying $14 million, according to CoreLogic, before the centre underwent a major redevelopment and extension in 2015 to deliver a new Coles and Liquorland and reposition of the specialty stores.
Coles has signed a new 15-year lease on the site, while 81% of the centre’s income is derived from national retailers.
Noonan says the reason Coles sold the site is because they were not traditionally holders of property.
“They acquired the site with the intention to develop and include themselves in the asset and they are just recycling capital,” he says.
This article from the Geelong Advertiser first appeared as Coles sells Torquay Village for $35m to Melbourne investor.