THE Woolworths Torquay Central supermarket has been snapped up for $5 million above the expected asking price.
Stonebridge Property Group listed the 2,980sqm freestanding supermarket at the corner of Bristol Road and Walker Street for about $20 million in late October, and acted as sole agent on behalf of a private family that developed the supermarket in 2004.
The sale, to a Melbourne-based private investor, is the first major supermarket sales campaign in Victoria following the lockdown period.
The $25,100,000 purchase represented a 3.65 per cent yield (including adjoining land) and 3.97 per cent yield (excluding adjoining land), which is a record yield for a regional Victorian supermarket investment.
Before the sale of Woolworths Torquay Central, there had been only two successful on-market supermarket-based investment campaigns in 2020 – Woolworths Keysborough South and Coburg Hill Shopping Centre, at respective yields of 5.4 per cent and 6.0 per cent.
Stonebridge’s Justin Dowers, Kevin Tong and Philip Gartland negotiated the sale of the property, which they described as Torquay’s “most substantial and strategic commercial landholding”.
“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 said.
Mr Tong said private investors made up all 14 of the 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.”
Stonebrige noted the trend of heightened interest from investors in regional commercial property, particularly coastal locations such as Torquay.
The emergence of the work from home and sea/tree trends that occurred last year because of COVID-19 has seen a drastic increase in the population levels and general sentiment towards key regional hubs.
The state government bringing forward its 50 per cent stamp duty savings on commercial property investments in regional Victoria is another factor in investors shifting their attention outside the metropolitan boundaries.
“Due to the population growth that regional Victoria is experiencing, in addition to the 50 per cent 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.