Investors continue to flock to retail as Woolworths Greenvale Lakes sells on a sub 4% yield

A brand-new Woolworths supermarket, BWS and two speciality shops has transacted for $27.7 million, representing a sharp yield of 3.95%.

The 3,403 sqm neighbourhood shopping centre is located in the growth suburb of Roxburgh Park, 25km* North of the Melbourne CBD and 15km* from the Melbourne airport. The 1.42-hectare site adjoins a McDonalds, proposed service station and vacant residential land.

Stonebridge Property Group Justin Dowers, Kevin Tong and Philip Gartland acted as sole agent on behalf of Woolworths Group Limited, who constructed the shopping centre in 2020 and was eventually sold to a Victorian based private investor.

The transaction demonstrates the continued positive sentiment around retail investments which are anchored by strong covenants, especially supermarkets. The yields for these supermarket anchored investments continue to compress with this deal, with the recorded yield being one of the sharpest seen in a metropolitan Melbourne shopping centre in the past 3 years.  

“Supermarket investments are extremely popular at the moment. The major supermarket retailers in Australia have yet again proven that they can perform in all economic conditions which is giving investors much more confidence”– Justin Dowers

“Investors can attribute sharper yields to supermarket investments because the long term lease renewal probability is so high. Investors have transparency over trading performance and the planning framework in Victoria minimises replication of the supermarkets, which is dissimilar to industrial assets. This is why supermarkets rarely move from their positions and why we see major supermarkets operating out of the same stores that were built in the 70’s and 80’s.” added Mr. Dowers

Stonebridge Director Kevin Tong added “2021 has been one of the most under supplied years, especially for those located in metropolitan locations. Woolworths Greenvale lakes represents the one and only metropolitan neighbourhood shopping centre offering in Victoria for 2021 and we are already 9 months into the year.”  

The campaign was highly competitive with the asset yielding 11 formal offers from a mix of local, interstate and offshore Asian investors and sold on an unconditional basis shortly after the conclusion of the EOI campaign.

Victorian Neighbourhood Shopping Centre Sales 2021

AssetSale DateSale PricePassing Yield
Torquay Village Shopping CentreJul-21$40,000,0005.00%
Coles MorwellJul-21$27,850,0005.12%
Coles Swan Hill Square Shopping CentreMay-21$20,075,0005.00%
Armstrong Creek Shopping CentreApr-21$55,600,0006.00%
Bellarine Village Shopping CentreMar-21$38,000,0004.82%
Newcomb Central Shopping CentreJan-21$42,950,0006.00%

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About Warwick Petschack

Warwick has over 25 years of property investment and management experience. Principally responsible as Managing Director for Capital Management Australia and Joint Managing Director for Chauvel Capital Partners and Editor of Australian Property Markets News.

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