Very ‘Friendly’ result sees Kew supermarket crush reserve by 35%

A property leased as a mini supermarket in the upmarket inner-Melbourne suburb of Kew has smashed its reserve by 35% at auction.

The Kew Friendly Supermarket sold for $1.641 million after more than 80 bids for the property, which sits within the Willesmere Village shopping strip.

As one of the suburb’s most tightly-held retail locations, the 81A Willesmere Rd property has not been offered for sale in more than 40 years and attracted more than 120 enquiries from potential buyers seeking a foothold in the Kew precinct.

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Leased to the supermarket operators on a five-year agreement to 2021, with a further five-year option, the reserve was set at around $1.2 million, with the yield on the sale price drilled down to 2%.

The supermarket occupies 400sqm of the 440sqm block.

Occupying a 440sqm block, the supermarket pays around $42,841 plus GST in annual rent, plus outgoings, and the lease comes with annual rent increases.

Teska Carson’s Jack Kelliher, who managed the sale with Michael Ludski, says investors were quick to move on rare opportunities in Kew.

“This was a great result for the vendor and reflected the pent-up demand for opportunities on a popular strip as well as increasing interest in assets that present future value-add or repositioning opportunities.”

“The property was sold for the first time in more than 40 years underlining just how tightly held these properties have become and how rare the opportunity was.”