Mentone Coles to stoke supermarket demand
A standalone Coles in Melbourne’s bayside suburbs is on the market as blue chip supermarket sites continue to trade at a premium.
The Coles at Mentone, south of the city, will go to auction on November 14 and is expected to attract interest from both investors and developers, with agents spruiking its future mixed-use potential.
The listing comes as standalone supermarkets remain among the most sought-after properties in Victoria.
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The seven most recent sales of standalone stores have all recorded yields below 6%, including a Coles at Clayton in the city’s south-east, which traded for $17.115 million, representing a yield of just 2.57%.
A Woolworths at Hadfield sold on a yield of 3.5% when it was bought for $11.75 million in May last year, while another Woolworths at Scoresby sold last August for $15.1 million on a yield of 4.5%.
The Coles at Mentone is leased to the supermarket giant on a 10-year lease from January 2017, with a further 10-year option, and currently returns $519,785 net per annum.
The internally refurbished property spans 2854sqm and has access to more than 150 at-grade car parking spaces.
CBRE’s Justin Dowers, who is marketing the property with Mark Wizel and Joseph Du Rieu, says
“The property obviously has a number of investment attributes, not the least being its 100% non-discretionary, blue chip, tenancy profile. But there is a further aspect that will drive buyer interest and that is around the site’s central location, its flexible zoning and its suitability for, perhaps, a mixed-use redevelopment down the track,” Dowers says.
“More and more we are taking enquiries from prospective buyers with questions on zoning, site access and population growth forecasts. The recognition of long-term, value-adding with metropolitan retail opportunities is the new black with what had been a relatively passive retail investor cohort, and it has swelled their ranks.”
The supermarket sits on a 2600sqm site with 106 metres of street frontage and sits opposite Mentone Reserve, within a short walk of Mentone railway station.
Wizel says the sale could present a telling sign of where the current retail market is at.
“We are not expecting a record yield, indeed yields have been easing over the last 18 months, but it would not surprise to see very robust competition between interested parties at what should be a very well-attended spring auction,” he says.
