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Coles Riverton sold for $31 million

Coles RivertonColes supermarket and First Choice Liquor store has been bought for $31.95 million from Coles Group Property Developments Ltd on a 5.29 per cent net yield.

Savills Australia said in a statement a private interstate investor has snapped up the supermarket and liquor store.

“The sale of Coles Riverton is the first example of a freestanding, full-service supermarket to hit the WA market in over 10 years. The distinct lack of stock in the premium-grade retail sector in WA ensured the asset was well received by a buyer pool that has previously been starved for high-quality offerings,” according to Chris Ireland, director, Retail Investments/Services at Savills Australia.

Located at 353-361 High Road, Parkwood, Western Australia, the 5,759sqm retail component sits on a 1.983-hectare site and is 100 per cent leased, with a 4,543sqm Coles supermarket, a 1,046sqm First Choice Liquor store, both wholly owned by ASX-20 Wesfarmers, a 170sqm government-owned TAB, as well as approximately 334 at-grade car parking bays. The property was completed and opened in September 2016.

Parkwood (Riverton) is an established inner-metropolitan suburb located 10km south-east of the Perth CBD and 12km from Perth Airport. The Coles lease was a new 15-year lease with four 10-year options and the First Choice Liquor lease was for 10 years with eight five-year options.

“Parkwood is a popular metropolitan suburb of Perth, close to the airport, and the prime location on a busy main road south of Perth CBD ensured a swift and successful sale, not to mention a solid yield for the Perth retail market,” according to Steven Lerche, national director, Retail Investments at Savills Australia.

“We have also sold Coles Coffs Harbour for $34 million on a passing yield of 5.54 per cent and another NSW Coles supermarket that sold for close to $27 million at a circa 5.2 per cent yield, demonstrating the strong buyer demand for Coles-leased assets.”

Coles Riverton boasts prominent main-road exposure benefiting from 25,000 passing cars daily, and was sold exclusively through Chris Ireland, Chas Moore, Barney Dear, Steven Lerche and Pat de Maria of Savills Australia.

Savills Australia said they received more than 290 enquiries on the asset, with significant east and west coast interest. There were 14 offers received from onshore and offshore buyers, and nine offers went unconditional before an interstate buyer sealed the deal with a quick exchange.

According to Savills research, the WA retail investment market continues to be one of the most tightly held markets in Australia, with the retail asset class remaining the most popular among investors. Investor demand remains strong, dominated by private investors, both local and eastern-state based.

Lerche said Savills Australia had a number of other sales to report on in the sector, following a strong end to 2017, including the sale of the Coles supermarket in Pacific Pines on the Gold Coast via auction in July, which achieved a price in excess of $30 million at a record low yield of 4.63 per cent.

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