Coles duo set to net $60m

Coles will sell one of its supermarkets as well as a shopping centre it anchors in New South Wales, in a pair of property sales expected to be total $60 million.

The Westmead Shopping Village in Sydney’s west, anchored by Coles and adjoining Westmead Hospital, is on the market and is expected to generate international interest, while a freestanding Coles in Bowral, in the state’s Southern Highlands, is tipped to be keenly contested.

The sales will be the latest in a string of divestments by Coles Group Property Developments, which only last week sold its Coles Pacific Pines shopping centre in Queensland for more than $30 million on a yield of 4.63%.

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The Bowral Coles will be sold subject to a 15-year leaseback to Coles and comprises a 4575sqm store with access to more than 330 car parking spaces.

Meanwhile, the Westmead Shopping Village occupies 4751sqm near Westmead University and Westmead Station, and has a small number of other retailers including the Coles-owned Liquorland.

Freestanding supermarkets on long-term leases are considered generational investments – rarely sold and typically held for more than 30 years

CBRE’s Justin Dowers, Nick Willis, Mark Wizel and Joseph Du Rieu have been appointed to market the properties.

Dowers says interest in both is expected to be strong both locally and internationally.

“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 says.

“The limited supply of quality retail investments such as freestanding supermarkets is anticipated to attract strong interest for these assets.”

Willis says it would likely be some time before either asset reached the market again.

“Freestanding supermarkets on long-term leases are considered generational investments – rarely sold and typically held for more than 30 years,” he says.