Coles looks to divest $60m worth of property

Coles Group PropertyColes Group Property Developments is looking to sell $60m worth of shopping centres, with two assets expected to attract strong buyer interest given their long-term lease structures to the supermarket chain.

The supermarket chain is looking to divest the freestanding Bowral Coles supermarket and Coles-anchored Westmead Shopping Centre.

The Bowral Coles, in NSW’s Southern Highlands region, comprises a net lettable area of 4,575sqm – the largest in the catchment – and access to over 330 car parks.

The property, which is 100 per cent leased to Coles on a 15-year term, is expected to attract strong buyer interest.

CBRE’s Justin Dowers, Nick Willis, Mark Wizel and Joseph Du Rieu, have been appointed to market the properties on behalf of Coles Group Property Developments.  

Justin Dowers said both assets were in established in areas strategic to Coles’ supermarket business, underpinning their current performance and growth potential.

“Both assets are leased back to Coles with long-term lease structures that provide minimal risk to investors and strong potential for income growth,” Dowers said.

“The limited supply of quality retail investments such as freestanding supermarkets is anticipated to attract strong interest for these assets. In the current market, annuity style investments such as freestanding supermarkets are rarely traded and provide investors with premium returns when compared to comparable low risk investments such as bond.”   

Willis added: “Freestanding supermarkets on long term leases are considered generational investments – rarely sold and typically held for more than 30 years.”

The second shopping centre being offered for sale is the Coles-anchored Westmead Shopping Village in Western Sydney.

The centre, which includes a strong non-discretionary retail mix, benefits from a strategic position adjoining Australia’s largest hospital, Westmead Hospital, which is currently undergoing a major redevelopment.

The 4,751sqm centre is also located 1km from the Westmead University, Westmead Train Station and the proposed new light rail, which connects Westmead to Carlingford via the Parramatta CBD.

Willis said the centre’s position within one of Sydney’s fastest growing regions would underpin strong buyer interest both nationally and internationally.

“Greater Western Sydney, and in particular Parramatta, is experiencing unprecedented growth, with over $10 billion in government infrastructure spend and the population set to increase by one million over the next 15 years,” Mr Willis said.  

“Existing retail and shopping centres within the catchment such as Westmead Shopping Village are set to benefit from this long term sustained population growth that will drive strong income growth for the investors.”

Coles Group Property Developments recently sold its Coles Pacific Pines shopping centre in Queensland for more than $30 million on a yield of 4.63 per cent last week.

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