Coles to Sell $60 Million Worth of Shopping Centres

Coles Group Property Developments are preparing to offer "generational assets" to the market as they gear up to sell Bowral Coles supermarket and Coles-anchored Westmead Shopping Centre.

The Bowral Coles, located just 1.5 hours’ drive from Sydney in NSW’s Southern Highlands region, comprises a net lettable area of 4,575 square metres – the largest in the catchment – and access to over 330 car parks.

The property, which is 100% leased to Coles on a 15-year term, is expected to attract strong buyer interest.

CBRE’s Justin Dowers, Nick Willis, Mark Wizel and Joseph Du Rieu, have been appointed to market the properties on behalf of Coles Group Property Developments.

Willis said freestanding supermarkets on long term leases are considered generational investments and are rarely sold - typically held by their owners for more than 30 years.

Dowers said both assets were in established in areas strategic to Coles’ supermarket business, underpinning their current performance and growth potential.

“Both assets are leased back to Coles with long-term lease structures that provide minimal risk to investors and strong potential for income growth,” he said.

“The limited supply of quality retail investments such as freestanding supermarkets is anticipated to attract strong interest for these assets.

"In the current market, annuity style investments such as freestanding supermarkets are rarely traded and provide investors with premium returns when compared to comparable low risk investments such as bond.”

The second shopping centre being offered for sale is the Coles-anchored Westmead Shopping Village in Western Sydney.

The centre, which includes a strong non-discretionary retail mix, benefits from a strategic position adjoining Australia’s largest hospital, Westmead Hospital, which is currently undergoing a major redevelopment.

The 4,751 square metre centre is also located one kilometre from the Westmead University, Westmead Train Station and the proposed new light rail, which connects Westmead to Carlingford via the Parramatta CBD.

Willis said the centre’s position within one of Sydney’s fastest growing regions would underpin strong buyer interest both nationally and internationally.

“Greater Western Sydney, and in particular Parramatta, is experiencing unprecedented growth, with over $10 billion in government infrastructure spend and the population set to increase by one million over the next 15 years,” he said.

“Existing retail and shopping centres within the catchment such as Westmead Shopping Village are set to benefit from this long term sustained population growth that will drive strong income growth for the investors.”

Coles Group Property Developments sold its Coles Pacific Pines shopping centre in Queensland for more than $30 million on a yield of 4.63% last week.