Neighbouring Coles and Kmart stores yours in one fell swoop

The Boronia Coles and Kmart sit alongside each other.
The Boronia Coles and Kmart sit alongside each other.

The weekly ritual of shopping for family essentials might be all it takes to persuade a cashed-up investor to swoop on a sprawling retail package now up for grabs in Melbourne’s east. 

Nestled within the Boronia Mall within a mix of specialty retailers, the GLA Boronia supermarket and adjoining Kmart store offers immediate returns to any buyer.

Coles has listed the 10,000sqm space as investor demand for non-discretionary retail assets increases.

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The Floriston Rd property includes a new 12-year lease to Coles supermarket and an established Kmart DDS lease, expiring in 2025 with 100 per cent of an estimated net income of $2.05 million derived from leases to ASX-listed retailers Coles Group and Wesfarmers.

The Coles and Kmart stores form part of the Boronia Mall and are adjacent to the Boronia Central retail centre. Other nearby stores include Australia Post, Liquorland, a news agency, bakery and medical clinic.

The two centres also have undercover parking. New lifts, travellators, plant and carpark works, including a smart carpark system are among the recent upgrades.

The precinct is designated as a major activity centre, which provides planning support for a range of uses including core retail, commercial and residential.

CBRE director investments Mark Wizel, who is marketing the property with senior director retail investments Justin Dowers, says he expects a strong response from hungry investors looking for guaranteed yield in a market starved of stock.

“The beauty of this centre is it has the benefit of two major national anchor tenants, but without the exposure to specialty income,” Wizel says.

“Non-discretionary spend tenants, like Coles, with an exceptional track record of performance, add another level of tenancy security which is particularly attractive in uncertain times.”

He says the property is particularly well placed for income growth and future development potential.

And despite growing global economic uncertainty, Dowers says the quality of the package is likely to attract a strong field of potential buyers, both local and overseas.

“Like most parts of Melbourne, Boronia has seen strong population growth and will continue to benefit from that growth, providing retailers and other businesses with confidence in the region’s long term prospects,” Dowers says.

Located less than one hour east of Melbourne’s CBD, Boronia is a major centre within the City of Knox with a population expected to grow by 17% to more than 192,000 by 2014.