Bairnsdale and Moe Coles sold as part of $62m deal
Retail investor Lascorp is looking to defy the gloom about shopping centres, pouncing on three Charter Hall supermarket-based assets for $62.35 million.
The play comes even as larger malls suffer as they are hit by retail chain bankruptcies and predictions of a soft Christmas trading.
There has been a spike in investor demand for both the comparatively attractive yields on retail assets and also investors seeking out defensive, supermarket-based retail assets.
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The assets included Coles Bairnsdale, which sold for $18.4 million on a 5.45% yield, Kyneton Shopping Centre, which sold for $22.85 million on a 5.5%, and Coles Moe, which sold for $21.1 million on a 5.7% yield.
Lascorp executive chairman Michael Lasky says the three assets also offer growth potential.
“The transaction is in line with Lascorp’s evolved strategy to focus more on income producing investments,” he says, adding he has confidence in both supermarkets and convenience retail market as a longer term defensive asset class.
“The assets acquired are all similar in nature, being net lease supermarkets with a long history of strong performance with opportunity for consistent future rental growth,” Lasky says.
Kyneton Shopping Centre has sold as part of a $62.35 million deal.
CBRE directors Mark Wizel and Justin Dowers brokered the transaction.
“Commercial property yields continue to appeal to a broader range of buyers turning their backs on the lower returns on offer from bonds or cash,” Wizel says.
“The group’s purchase of three very passive retail assets makes a very big statement about just how hard it is to find returns in the current market, not to mention the value of the cash flow that is stemming from these defensive supermarket assets,’’ Wizel says.
The sale follows that of the stand-alone Coles Mentone late last month that sold on a tight yield.
Wizel says over 2019 there has been a definite trend towards so-called defensive property investments with neighbourhood centres and stand-alone supermarkets doing particularly well despite the significant retail headwinds.
“This year we have seen yields hover around 5.5% following an average closer to 4.5% over 2018 but this result, following that of Coles Mentone, which sold earlier this month, unambiguously indicates demand for this product remains very strong,’’ Wizel says.
Coles Clayton, which sold for $17.115 million, holds the Victorian record yield for stand-alone supermarkets at 2.57%, with the previous record held by Woolworths Middle Brighton which sold for $32 million on a 3.8% yield in 2016. The assets, along with Coles Mentone, were all sold by CBRE.
This article originally appeared on www.theaustralian.com.au/property.
