Woolworths sale meets investor demand in Melbournes north
Woolworths sale meets investor demand in Melbourne's north
| 19 October 2016
The strength of Victoria’s freestanding supermarket investment market is set to be tested for the second time in recent months, with the upcoming sale of Woolworths Glenroy (Hadfield).
Mark Wizel, Justin Dowers and Kevin Tong of CBRE’s Victorian Retail Investments team have been exclusively appointed to bring the metropolitan retail investment to the market, via an Expressions of Interest campaign closing mid-November.
Located only 16km north of the Melbourne CBD, the 5,569sqm freestanding Woolworths supermarket has been trading on the site since 1979 - servicing the Glenroy region for over 37 years.
The supermarket benefits from prime location alongside the popular West Street retail precinct, which houses a range of local and national retailers ensuing consistent foot traffic to the area.
The Woolworths Glenroy (Hadfield) sale represents the second recent metropolitan Melbourne freestanding supermarket to be offered to the market, with the sale coming just months after Woolworths in Brighton transacted for a 3.77% yield - a record result for freestanding supermarkets in Australia.
“Over the past few years we have seen yields for freestanding supermarkets sharpen substantially on a national basis. This sector is consistently attracting both local and offshore buyer interest, underpinned by improved sentiment towards both retail performance and retail assets as a secure investment,” Mr Wizel said.
“Strong investor interest is expected for the site, underpinned by the established supermarket tenant, significant street frontage to a metropolitan strip location, sizable landholding and triple net lease to a leading national retailer.”
The consistently strong performance of the Victorian economy, along with the state leading the way on population growth at 1.75% pa, is attributed to improving retail conditions in the state and attracting investors - particularly those based interstate who view Victoria as a premium retail market.
“Direct investment in the region into both infrastructure and developments, coupled with recent gentrification and planning reforms, is allowing Melbourne’s north to undergo significant growth including a positive shift in customer wealth. The council catchment has also undergone significant gentrification over the past decade - driven by a younger demographic discovering the charms of the catchment being only circa 10km north of the city centre,” said Mr Dowers.
“Glenroy and Hadfield are booming commercial and residential locations for the younger generation, with this demographic targeting the area to benefit from the affordability and proximity to the Melbourne CBD. As the area continues to grow in popularity, we expect pricing for residential houses to increase to match those in neighbouring suburb Coburg, which is over 40% above both Glenroy and Hadfield.”
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), 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 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 400 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.