Surf Coast Woolworths listed with $20m price tag

A Torquay supermarket fresh from a $5 million upgrade has hit the market to test the level of interest in “recession-proof” retail assets.

The standalone Woolworths Torquay Central supermarket occupies a 7331sqm commercial zoned property in the town’s centre which also offers potential development opportunities.

With a value pegged at around $20 million, the property has four street frontages.

The freestanding 2980sqm building on Bristol Road includes a BWS store and is let on a 20-year term, expiring late in 2024 plus further options, with a passing net income of $916,029.

There are 127 car spaces on title and additional car spaces on an adjacent council lot.

Woolworths’ standalone supermarket at Torquay Central is on the market.

Stonebridge Property Group partner, Justin Dowers, who is marketing the property with Kevin Tong and Phil Gartland, said Woolworths recently undertook a $5 million capital works program highlighting the retailer’s commitment to the location.

“Standalone supermarkets are rare and highly sought after by investors and have been over a long period of time and in many instances have produced very strong results,” he said.

“That 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.

“Daily needs tenants, like Woolworths, with an exceptional track record of performance, add another level of tenancy and rental income security which is particularly attractive in uncertain times,’’ Mr Dowers said.

He said the property would be sold with a net lease structure to Woolworths/BWS, at an occupancy cost ratio of under 3%, and with a growing supermarket turnover.

Woolworths’ standalone supermarket at Torquay Central is on the market.

The Surf Coast capital’s affluent and growing population, on top of the usual tourism activity, underlined the increasing turnover at the store.

Recent sales of freestanding supermarkets show strong demand reflected in many instances in sub 5 per cent yields, including Woolworths Lara which sold for $21.1 million in 2019 at a circa 5 per cent yield.

Two years earlier, Woolworths’ Highton supermarket achieved a 4.6% yield in a $12.43 million sale.

Mr Tong said the property represented the most substantial and strategic commercial landholding in Torquay, providing significant scope for future mixed-use redevelopment given the central location opposite Taylor Park and 300 metres from the beach.

“We are not simply talking about a recession-proof income stream from a blue-chip tenant, but a property which also offers exceptional development prospects down the track at the gateway to the Great Ocean Road – one of Australia’s foremost tourist destinations,’’ Mr Tong said.

This article from the Geelong Advertiser originally appeared as “Woolworths’ store offers super test for recession-proof assets”.