Industry News

Woolworths Orange transacts for $19.5m

Freestanding supermarket and liquor stores have for many years been the darling of retail investment sector and this trend looks set to continue off the back of strong supermarket and food sales. Woolworths Orange in NSW has demonstrated that retail remains ripe for private investor investment – transacting for $19.5 million at a yield of 5.6%.

Woolworths Orange is a purpose built modern single level full line freestanding supermarket, surrounded by convenient on-grade car parking in front of the property and complementary surrounding developments occupied by retailers such as Harris Farm, Chemist Warehouse and other high street tenants.

According to Steven Lerche, National Director, Retail Investments at Savills Australia, who negotiated the sale alongside colleague Andrew Palmer, “This assets class remains a highly sought after sector of the Australian market with groups bulking up on ‘Essential Services’ and ‘Daily Needs.’

“In the last three years, some 38 freestanding Coles and Woolworths supermarkets have sold, but only three of those sold in 2020. This recent sale of Woolworths Orange reaffirms that non-discretionary retail continues to ‘hit the spot’ and other sales this year have been in regional towns including Woolworths Lithgow, which sold for $14.65 million on a 5.49% yield and Woolworths Wadalba which sold for $26.15 million on a 5.7% yield” he said.

According to Andrew Palmer, Associate Director, Retail Investments at Savills Australia, freestanding supermarket yields over this three year period have ranged between 2.57% to 6.25% and the average is tightening due to the willingness to accept lower returns.

“It is expected this trend is likely to continue into 2021 with groups eagerly looking for long term security and cash flow” he continued.

The property benefits from a prominent and enviable location in the heart of Orange, a major regional city in the central west region of NSW, some 254kms west of Sydney. The property sits on an approximate site of 3,113m2 and features a rare net lease to Woolworths Limited, expiring August 2034 with two option terms of five years.

Lerche said despite the effect of Covid -19 across the country, strong NSW regional towns such as Orange, Dubbo, Wagga, Tamworth, Bathurst have all prospered and will further benefit from local tourism whilst international border are shut.

 “Orange CBD has also seen the transformation of the Orange City Centre that underwent a redevelopment, following the exodus of Myer, to create a new and exciting retail environment which accommodates a new food court, a mini-major and a range of specialty shops.” said Lerche.

Two more freestanding supermarkets are currently in the market Woolworths Torquay and Coffs Harbour and likely to transact soon.

About the author

Shopping Centre News

Shopping Centre News (SCN) is in the ‘information business’, and is perceived as such by its readers. Daily industry news makes a must-visit as part of the morning routine for those who want to keep right across the latest retail developments and events, while SCN's premium magazine is the leading publication for the shopping centre industry in Australia and New Zealand.

Known as the ‘industry bible’ SCN is printed five times a year with fascinating, in-depth features and important critical analysis written by known industry insiders as well as the popular ‘Guns’ reports, which ranks Australian shopping centre performances. Shopping Centre News is the only publication in the world that features centre statistics on Turnover, Turnover per square metre and Specialty Shop turnover per square metre for every major centre in Australia.

Add Comment

Click here to post a comment

Notice: Undefined index: comment_cookie_gdpr in /opt/amaze/srv/live/app/www/wp-content/themes/herald/core/template-functions.php on line 28

Notice: Trying to access array offset on value of type null in /opt/amaze/srv/live/app/www/wp-content/themes/herald/core/template-functions.php on line 28