Melbourne, 11 May 2016- A rare freestanding supermarket in Melbourne is set to bring about strong buyer competition later this month when CBRE Victorian Retail Investments bring Woolworth Middle Brighton to the market.
Woolworths Middle Brighton is situated at the heart of the Church Street retail precinct in Brighton, being one of the most affluent suburbs in Australia. The supermarket recently underwent a significant refurbishment and is offered for sale with a new 25 year lease (23 years remaining). It is for sale via an international Expressions of Interest campaign set to close in late June.
CBRE Victorian Retail Investment Directors Mark Wizel and Justin Dowers are acting exclusively for the private vendors who have held the property for in excess of 30 years.
Mr Wizel said the recently refurbished Woolworths supermarket is expected to attract significant buyer interest in the high $20 million range, with most interest expected to come from passive private investors as well as a range of family office style buyers who will be attracted to the sound fundamentals associated with the offering.
“Woolworths Middle Brighton represents the first metropolitan Melbourne freestanding supermarket to be offered in the last two years and comes just weeks after the successful sale of Woolworths in Launceston which sparked strong investor interest culminating in a sales price that provided a 5.3% yield, a record for a Tasmanian Supermarket,” Mr Wizel said.
“Properties like Woolworths Middle Brighton are very rare. It is unusual to find an asset with significant street frontage to a top three metropolitan strip location, combined with an enormous 4,500+sqm land holding and providing a long term net lease to one of Australia's strongest performing retail tenants.”
“Throughout 2014 and 2015 we saw yields for freestanding supermarkets sharpen substantially on a national basis. The sector attracts both local and offshore buyer interest as a result of continued improved sentiment towards retail performance and the realisation that the world is in a low growth environment and the benefits of sound retail commercial property far outweighs the positives for hoarding cash,” Mr Wizel added.
The consistent strong performance of the Victorian economy, along with sustainable population growth - which is improving retail conditions in the state - has been a key attraction for investors, particularly those based interstate who are vying against local and overseas buyers who recognise the premium nature of owning retail property in Victoria.
“What is so important about this lease is that it is virtually the longest tenure from a Woolworths freestanding supermarket offered Australia wide in the past two decades. Not to mention the fact that the lease in place is of a net nature ensuring that the successful buyers position is protected throughout the duration of the lease,” Mr Dowers said.
Brighton is well known for the bayside luxury living along with mansions and luxury apartments. This has seen median house and apartment prices being pushed to $2,137,500 and $880,000 respectively. The suburb has continued to see growth amongst the wealthy locals, in addition to new offshore wealth which is becoming more prominent in the suburb as buyers flock to what is regarded as one Melbourne's premier suburbs.
“Brighton is now also becoming a major residential location for wealthy Chinese families. The affluent waterfront lifestyle and large mansion houses are particularly attractive to the offshore migrants, over the past 2 years we have seen over seven $15m + house sales to Chinese buyers,” Mr Wizel added.
“Brighton also benefits from elite education institutions such as Brighton Grammar Boys School and Firbank's Girls school. They are both synonymous with the very best in Melbourne has to offer by way of primary and secondary education.”
Mr Dowers noted that despite the long term security of the Woolworths supermarket, the real value of property lies within the underlying land value; “The average land rates for development sites in Brighton have been selling between $5,000 to $6,000 per sqm. However given the prominent location of over 4,500sqm on Church Street and the significant rental rates achieved for retailers on the strip, we expected significant higher rates for the site.”
Industry experts point to the fact that this could be one of the most underdeveloped sites of its kind and that longer term opportunities could see the store make way for a major development to re-include a Woolworths Supermarket on the ground floor, as well as taking advantage of the clear opportunity with the air rights above.
