Oreana Property Group has sold a Coles Express Service Station in Wollert to a private investor for $4,650,000, representing a yield of 6.32%.
Coles Express Wollert at 246 Epping Road, 29km north of the Melbourne CBD, was developed by Oreana in 2016. The property forms part of a larger strata arrangement with surrounding retailers, sharing access and common property.
Managed by CBRE’s Justin Dowers and Kevin Tong, the campaign attracted a strong level of interest due to the property’s 10-year lease to ASX listed Viva Energy Group, with the covenant having commenced in 2016.
“We are still fielding investor interest off the back of strong demand from last year, although the COVID-19 situation has been reflected in the depth of that demand – making buyers more sensitive to the type of assets they seek to acquire,” Mr Dowers said.
“In terms of pricing, there is argument to say that there has been minimal impact at this stage for assets that are single-tenanted and leased to major tenants with covenants of over five-years.”
The population forecasts for Wollert and how this will underpin the property’s growth potential was also a key consideration for the buyer.
“According to the City of Whittlesea, Wollert has a current estimated population of about 29,165 people. It is expected to grow by more than 50% over the next 15 years to nearly 55,576 by 2041,” Mr Dowers said.
“That is extraordinary growth and there seems little doubt that the Coles Express Wollert will be a beneficiary.”
Mr Tong notated that Asia-based investors were continuing to seek out income-producing properties, with capital from five recent sales in the sector originating from China and a sixth from Hong Kong.
“What we are witnessing, first-hand, is that long leased investments are still very attractive to Asia-based investors, especially those that offer national covenants,” said Mr Tong.
Recent Victorian retail investments transacted to Asia-based investors
Coles Express Wollert at 246 Epping Road, 29km north of the Melbourne CBD, was developed by Oreana in 2016. The property forms part of a larger strata arrangement with surrounding retailers, sharing access and common property.
Managed by CBRE’s Justin Dowers and Kevin Tong, the campaign attracted a strong level of interest due to the property’s 10-year lease to ASX listed Viva Energy Group, with the covenant having commenced in 2016.
“We are still fielding investor interest off the back of strong demand from last year, although the COVID-19 situation has been reflected in the depth of that demand – making buyers more sensitive to the type of assets they seek to acquire,” Mr Dowers said.
“In terms of pricing, there is argument to say that there has been minimal impact at this stage for assets that are single-tenanted and leased to major tenants with covenants of over five-years.”
The population forecasts for Wollert and how this will underpin the property’s growth potential was also a key consideration for the buyer.
“According to the City of Whittlesea, Wollert has a current estimated population of about 29,165 people. It is expected to grow by more than 50% over the next 15 years to nearly 55,576 by 2041,” Mr Dowers said.
“That is extraordinary growth and there seems little doubt that the Coles Express Wollert will be a beneficiary.”
Mr Tong notated that Asia-based investors were continuing to seek out income-producing properties, with capital from five recent sales in the sector originating from China and a sixth from Hong Kong.
“What we are witnessing, first-hand, is that long leased investments are still very attractive to Asia-based investors, especially those that offer national covenants,” said Mr Tong.
Recent Victorian retail investments transacted to Asia-based investors
| Address | Date | Price | Yield | Origin of Capital |
| Coles Express Wollert | Mar-20 | $4,650,000 | 6.32% | China |
| Coles Mentone | Dec-19 | $15,300,000 | 3.39% | China |
| Cole Aurora Village | Jan-19 | $44,500,000 | 5.77% | China |
| Aldi Seville | Sep-19 | $8,020,000 | 6.05% | China |
| Coles Lalor Plaza | Jul-19 | $7,380,000 | 6.34% | Hong Kong |
| IGA Ringwood East | Mar-19 | $7,340,000 | 5,43% | China |
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
