Torquay Village sells for $35 million

THE price is right for Torquay Village, which has been sold for $35 million.

Coles Group Property Developments put the shopping centre in Bristol Road on the market in October by expression of interest through commercial real estate firm JLL, and the sale was completed earlier this month.

Expected to attract interest of about $40 million, the final sale price reflected an initial yield of 5.89 per cent.

Torquay Village is anchored by a full-line Coles supermarket and Liquorland and is accompanied by 15 specialty shops, and occupies 1.4 hectares in the heart of Torquay’s town centre.

Coles Group Property Developments bought the site formerly known as Torquay Central in 2013, and the shopping centre underwent a major redevelopment and extension in 2015.

Secured by a 15-year lease to Coles, the shopping centre offered investors a weighted average lease expiry (WALE) by income of 10.17 years.

“Retail assets with strong lease covenants such as Coles continue to be hotly contested,” JLL Victoria head of retail investments Stuart Taylor said.

“These assets attract investors as they are considered to be low risk, defensive assets, offering strong security of income.

“The sale of Torquay Village continues the theme of Victorian neighbourhood assets regularly trading at yields below 6 per cent.

“The Victorian neighbourhood mid-point yield (5.63 per cent) remained the sharpest across Australia.”

JLL retail investment director Tom Noonan said neighbourhood centres had maintained the highest levels of demand from the investment community, but transaction volumes were being constrained by the limited acquisition opportunities.

Three Woolworths-anchored shopping centres were sold in 2017, and two Coles-anchored centres (Springhill and Coburg Village) sold for $43 million and nearly $38 million respectively in 2016.