Buyers shift to pandemic proof investments as Woolworths Torquay transacts for a record sub 4% yield

Woolworths Torquay Central represented the first major supermarket sales campaign in Victoria following the extensive lockdown period.

The 2,980sqm regional freestanding supermarket sold for $25,100,000, which represented a 3.65% yield* (Inc adjoining land) and 3.97% yield* (Exc adjoining land). Stonebridge Property Group acted as sole agent on behalf of a private family that developed the supermarket in 2004. The property was sold to a Melbourne based private investor.

The sale represents a record yield for a regional Victorian supermarket investment.

Prior to the sale of Woolworths Torquay Central, only two on-market supermarket-based investment campaigns in Victoria had transacted during 2020. Woolworths Keysborough South and Coburg Hill Shopping Centre were exchanged at yields of 5.4% and 6.0% respectively.

Stonebridge Property Group’s Justin Dowers, Kevin Tong and Philip Gartland negotiated the sale.

“What became clear as soon the marketing campaign for Woolworths Torquay Central commenced was the sentiment for this type of investment product had heightened, particularly due to an increase in supermarket sales performance further cementing these investments as the “go-to” recession / pandemic proof investment, similar to that of certain logistics assets.” Mr Dowers commented.

Mr Tong added “Private investors made up all 14 of the 14 offers on the property, however the most aggressive buyers that were identified when the bids were received, represented high net worth individuals that were not necessarily common industry players. These buyers were individuals that had ongoing business interests outside of property and an increased appetite to shift a growing wealth pool (due to business profits) into a secure investment like Woolworths Torquay Central.”

Another interesting trend was the heightened interest from investors in regional commercial property, particularly coastal locations like Torquay. The emergence of the work from home and sea/tree trends that occurred last year due to COVID-19 has seen a drastic increase in the population levels and general sentiment towards key regional hubs. In conjunction with this, the initiative from the state government to bring forward 50% stamp duty savings on commercial property investments in regional Victoria created another factor for investors to shift their attention outside the metropolitan boundaries.

“Due to the population growth that regional Victoria is experiencing, in addition to the 50% stamp duty savings, it is becoming evident that regional Victorian retail yields are compressing to a level close to, and in some cases in line with, Metropolitan Melbourne” Mr Dowers said.

For further information please contact –

Justin Dowers | +61 438 098 805 | jdowers@stonebridge.com.au

Kevin Tong | +61 422 848 818 | ktong@stonebridge.com.au

Phil Gartland | +61 403 582 324 | pgartland@stonebridge.com.au

 

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