Supermarket, Childcare Dominate $75 million Stonebridge Portfolio

Demand for freestanding commercial property investments remains at peak levels, with investors securing over $75 million worth of assets as part of Stonebridge Property Group’s inaugural National Portfolio.

The portfolio comprised of eight properties along the Eastern Seaboard, including assets within the supermarket, childcare, fuel & convenience retail, and medical sectors.

Leading the Portfolio was a Coles Supermarket in Lalor, Melbourne, the first offering of its kind in Victoria for 2022, selling for $13,768,888 at a low 2.98% yield. The 3,365 sqm property is leased to Coles Group until 2028. The purchaser was a consortium of private investors with capitals sources coming out of Vietnam, who were attracted to the long-term income security and upside potential.

Commenting on the sale, Stonebridge’s Asia Practice Partner, Kevin Tong said “Since the opening of international borders in February, demand from Asian investors, especially for blue chip investments, has continued to grow with demand not only coming from China, but other parts of Asia including Hong Kong, Singapore, and Vietnam. Over 25 offers were sourced via our Asia Practice across the wider Portfolio.”

Childcare centres continue to be highly sought after, with three Queensland facilities selling for a combined $25 million to private investors. The highlight childcare sale was the Little Locals in Auchenflower, Brisbane, transacting for $11,050,000 on a 4.52% yield. The high profile 2,038 sqm site was offered for sale with a 20 year lease-back by well-regarded private operator, Little Locals.

Strong demand for regionally located assets remains, demonstrated by the sale of a childcare centre at Westbrook on Toowoomba’s fringe, selling for $8,677,000 at a record low regional Qld yield of 4.80%. The asset was also offered for sale by the Little Locals Group, on a 20-year lease-back arrangement.

Stonebridge Partner, Tom Moreland, said “Investors continue to take note of the childcare sectors resilience and the Federal Government’s role in ensuring its longevity. There is now over $12 Billion allocated to childcare subsidies. This, coupled with the long-term lease fundamentals of the freehold investments, providing an annuity style income stream, has driven yields to all-time low levels.”

Rounding out the portfolio of sales were a freestanding property leased to furniture retailer, Early Settler, at Blackburn in Melbourne’s east, selling for $12,100,000 on a 4.05% yield, a Shell Coles Express service station at Ipswich, selling for $7,650,000 on a 5.60% yield, a medical freehold leased to National Dental Care in Townsville, selling for $3,600,000 on a 5.12% yield and a BP/Carls Junior at Clayton. This property is currently under negotiation.

Stonebridge Partner, Michael Collins, said “Investor appetite for securely leased commercial investments remains high, with over $520 million of unsatisfied, active capital seeking new opportunities off the back of this Portfolio. Despite ongoing rhetoric in relation to likely interest rate increases, the sheer weight of capital seeking quality investments is keeping the market incredibly buoyant. We expect this to continue for some time”.

The assets within the Portfolio were offered for sale by Stonebridge’s national team of Michael Collins, Tom Moreland, Rorey James, Kevin Tong, Justin Dowers, and Thomas Proberts.

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