A full-line Coles Supermarket featuring a rare 20-year lease (expiring June 2036) in Five Dock is set to be the first publicly marketed Sydney metropolitan Coles Supermarket since 2019.
The property is likely to be hotly contested, given the pent-up demand for pandemic proof assets and the centre’s $25 million price expectations.
James Wilson and Alex James-Elliott of Colliers are handling the sale, with the campaign launching in June 2021.
Coles Five Dock is located in the prized inner west of metropolitan Sydney, only 9kms from the CBD. It is positioned along the high-profile retail strip of Great North Road, and is forecast to benefit from the proposed Sydney West Metro Five Dock Station opening in 2030.
“Supermarket investment demand, specifically from the private investor market, coupled with the record low cost of debt is anticipated to drive purchaser engagement for this campaign, said James Wilson, National Director of Retail Investment Services at Colliers.
“Investors will be attracted to the increased security afforded by the supermarkets 20 year lease, given the most recent ‘sale and lease back’ campaigns divested from Coles and Woolworths feature 10 year leases.”
“The Coles supermarket dominates its catchment, being the only full-line supermarket offering and is trading 29.2% above Urbis benchmarks resulting in percentage rent. Strong MAT forecasts may result in income growth, particularly given an upcoming Base Rent Review in June 2022 and an MTA reflective of affluent family demographics with per capita incomes 32.0% above Sydney averages.”
Alex James-Elliott, Associate Director, Retail Investment Services at Colliers said, “There were only two publicly marketed supermarket opportunities in 2020, a year in which supermarkets highlighted their investment fundamentals.”
“The last Sydney metropolitan supermarket brought to market was back in 2019. This lack of stock and current investor demand for strong performing supermarkets investments, means that investors demand has not yet been satisfied.”
“We expect further opportunities for investors to secure metropolitan supermarkets in Sydney for 2021 to be limited.”