CBRE has sold the Woolworths Hadfield in Melbourne’s northern suburbs for $11.75 million – marking the third time in two years the asset has transacted.
Located on a 5,600sqm site in Melbourne’s inner north, the freestanding Woolworths was sold by CBRE in 2016 to St Albans-based plumber Emmanuel Zahra for $9.75 million. Then in 2017, it was auctioned for $8.75 million, however, the contract was forfeited.
In its most recent change of hands, the property was purchased by a Melbourne investor for $11.75 million – reflecting a yield of 3.5% and profit of $2 million since it last transacted.
Mr Zahra commented on his growing confidence in the retail market: “This is just the beginning, I’m going to buy half a dozen of these things.”
The property, which has a one-year lease remaining to Woolworths, marks the fourth freestanding supermarket sale nationally this year, and the second in Victoria.
CBRE’s Mark Wizel said the transaction highlighted the shift in investment focus to income producing assets.
“As the market for retail investment properties continues to evolve, our team has made a deliberate decision to focus on strategically positioning properties and pairing qualified investments with suitable assets,” Mr Wizel said.
The sale follows the trend of low returns on supermarket investments, with recent transactions including Coles Clayton in VIC for $17.115 million (2.57% yield) and Coles Earlwood in NSW for $28.72 million (4.22% yield). The assets were purchased by a Melbourne and Asian investor respectively.
CBRE’s Joseph Du Rieu said the market remained bullish towards retail investment properties.
“As global interest rates continue to increase, logic suggests that investment yields should follow, we are yet to see that. It is clear that some of our clients are continuing the trend of divesting properties that may not be ‘core’ to their portfolios and are making the most of the current buyer sentiment.”
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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 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 450 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.