WOOLWORTHS has listed its standalone Lara supermarket in a test of the strength of demand for a traditional favourite for retail investors.
The supermarket is the latest major retail asset to hit the market in the Geelong region and falls into a category that draws a large non-discretionary spend and the security of a long lease to blue-chip tenants.
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Industry sources said price expectations would be above $20 million, in line with recent sales in the retail category.
The store was redeveloped in 2015 amid a spending war with rival and new entrant to Lara, Coles, to service the rapidly growing population on Geelong’s northern fringe.
Located at 50 Centreway, the freestanding store has a 4195sq m floorplate on a 8804sq m site with 241 car spaces.
The property, which includes a BWS liquor store, is on a 12-year lease to the grocery giant.
CBRE director investments, Mark Wizel, who is marketing the property with Justin Dowers and Kevin Tong, said he expected a strong response from investors in a market short of quality stock.
“Standalone supermarkets are like gold to investors and have been over a long period of time and in many instances have produced very strong results,” Mr Wizel said.
“This has been due to some of the best investment credentials you will find in any commercial property asset including long leases, blue-chip tenants and high underlying land value.
“Non-discretionary spend tenants, like Woolworths, with an exceptional track record of performance, add another level of tenancy security which is particularly attractive in uncertain times,” Mr Wizel said.
He believed the supermarket would attract a strong field of potential buyers given there is a lot of money — both local and offshore — looking for a home in property and quality assets were in short supply.
“Asian buyers in particular have demonstrated a penchant for retail assets of late with those properties offering significant land components at the top of the list,” Mr Wizel said.
The property has been listed a month after an investor emerged for Coles standalone Drysdale supermarket.
The family investment firm Temax Nominees paid $23.5 million for the Murradoc Rd complex from Coles property arm.
The 10,550sq m site has a full-line Coles supermarket, Liquorland and 168 car parking spaces.
The last sale of a standalone Woolworths supermarket in the Geelong region was at Highton in 2017, where a private investor paid $12.43 million for the site, achieving a 4.6 per cent yield.
Mr Dowers said the prime town centre location, tax depreciation on the recently constructed building, one-site parking with access from three streets and the growing local catchment were also attractive attributes.
“Population growth in the Geelong district has been driven at least partially by an influx of buyers from Melbourne’s overheated residential market.
“Lara seems well placed, on the northern Princes Highway approach to Geelong and within relatively easy commuting distance of Melbourne, to absorb some of that influx and of course that will impact the retail catchment,” Mr Dowers said.
A .id forecast show’s Lara’s population to increase to more than 24,000 people by 2036.