NEWS

Sydney’s retail famine comes to an end for hungry investors

First full line Sydney metro supermarket to hit the market in two years: Coles Five Dock.

The retail investment famine appears to be over, with Sydney set to see the first full line metro supermarket on offer for the first time since 2015. Coles Five Dock provides a rare opportunity to acquire a modern 3,430sqm supermarket featuring a brand new lease to Australia’s leading supermarket retailer.

The Coles supermarket features a rare 20 year lease. The Five Dock opportunity provides investors unparalleled security with anticipated future income growth reflective of the store’s strong turnover.

Located at 4-12 Garfield Street, this asset is only 9 kilometres from the Sydney CBD, positioned in the heart of Five Dock’s established commercial and retail village. The Coles supermarket is located on ground level of this modern mixed use development, which allows convenient secure basement parking for its customers.

Coles acquired the business from Supabarn Supermarkets Pty Ltd which is a member of the Koundouris Group of companies in 2016, to get a foothold in Five Dock. This strategy highlights the high barriers of entry, and lengths required by a competitor when planning for a new ‘full line’ supermarket in an established capital city such as Sydney.

The property will be available via an Expressions of Interest campaign in February with price expectations in the $20 million range through James Wilson and Alexander Elliott of Colliers International.

According to James Wilson, Director, NSW Retail Investment Services at Colliers International, “The combination of a tightly held asset type, Sydney metropolitan location, distinct lack of any competition and an extremely affluent catchment mean that Coles Five Dock will be keenly contested by investors seeking a trophy retail investment”.

Coles five dock

“The beginning of 2017 has brought immediate market activity within the supermarket and neighbourhood shopping centre space not experienced in previous years. Clients are looking to realise the full potential of their property by taking advantage of the record breaking conditions driven by huge equity levels, low cost of debt and limited retail investment opportunities available in 2016.”

Mr Wilson went on to say that the NSW retail market hasn’t had the quality or quantity of stock of other states, as is evidenced by the recent Victorian transactions on tight yields including Brighton Woolworths for 3.77% and Pakington for 4.7%.

According to Alexander Elliott, Executive Retail Investment Services at Colliers International, “Five Dock’s strategic location between the Parramatta and Sydney CBD, coupled with its close proximity to the highly publicised Parramatta Road Urban Transformation Strategy, highlights its value to sophisticated retail investors.”

Colliers International is offering Coles Five Dock for sale via Expressions of Interest, closing Wednesday, 8 March 2017 at 2pm.

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