COLES Group has sold its freestanding Drysdale supermarket for more than $23 million less than two years after the doors first opened.
Melbourne family investment firm Temax Nominees bought the Murradoc Rd complex from Coles’ property arm in a deal negotiated through commercial agents Gross Waddell and Stonebridge.
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Gross Waddell agent Alex Ham said the offer and acceptance of the $23.5 million bid was completed within a week on the 10,550sq m site, which has a full-line Coles supermarket, Liquorland and 168 car parking spaces.
The supermarket opened in May, 2017.
The grocery giant was selling with a new 15-year lease and two 10-year options in play for the site, which is part of Drysdale’s expanding central business district.
The property generates an annual rental income of $1.26 million.
The sale price was below the initial $25 million price hopes when the property was initially listed with JLL last June.
While Coles has sold its Bellarine Peninsula asset, the owners of the nearby Drysdale Village, anchored by a Woolworths supermarket, are still in the market for a buyer.
The private owners have held the property for 20 years.
Industry sources suggest it would sell for more than $15 million.
The region’s major retail industry witnessed a flurry of activity in 2018, with four shopping centres trading, including Leopold’s Gateway Plaza for $117 million, Belmont Village for $58 million, Bellarine Village for $36.5 million and Torquay Village — another Coles asset — for $35 million.
Two more shopping centres remain in play, with Vicinity Centres still shopping for a buyer for its Corio Central complex in a bid to sell $1 billion worth of assets to fund developments in Melbourne, while a half share in Waurn Ponds Shopping Centre is also on the market.
Mr Ham said Melbourne investors were turning their focus to strong regional cities, like Geelong, as there was a shortage of stock in Melbourne.
“We’re finding a lot of focus on the Bellarine Peninsula and Geelong, from Melbourne investors who can’t get into the market,” he said.
Mr Ham said buyers were looking to spend between $500,000 to $25 million in the Geelong sector.
“I’ve got people coming out of my ears to buy office buildings,” Mr Ham said.
“The institutional grade clients are really looking at the newer look stock, they are also buying a lot of things off the plan, things that haven’t been built but have been pre-leased.
Private investors and smaller syndicates were interested in older buildings, he said.
“We’ve really seen an increase in the last two years.
It’s been driven by the Melbourne investors — they can’t get into the market here, we’ve had a lack of stock in the Melbourne market.
“They are really looking at the regionals, Geelong, Bendigo, Ballarat. I even sold an office building in Traralgon last week for $13 million.”
Mr Ham said while yields were sharpening in the regional centres, investors were still getting a better return than in Melbourne.
“They’re also now getting capital growth as well because of the demand,” he said.