By Tyler Wright
Monbulk’s Woolworths site has been sold to a China-based buyer in his first commercial Australian venture.
CBRE’s Scott Hawthorne, who handled the listing alongside two of his colleagues, said the depth of bidding for the property could give anyone around Monbulk “a lot of confidence”.
“There were 20 offers received for the property, which for a property of this nature is exceptional,” Hawthorne, a senior negotiator for Melbourne metropolitan sales at the company, said.
“Anytime you have an ASX listed tenant… you’re always going to be held in good stead; but the fact that we had 20 bids certainly demonstrates there’s a lot of groups who are looking to buy in this part of the world.”
It’s been reported the 6,900 square metre freestanding supermarket sold for $14.5 million, with Woolworths holding the lease for another 10 years.
The Woolworths supermarket has been servicing the region for over 40 years after being built in 1979, and was refurbished in 2016.
Hawthorne said the main thing that attracted the buyer was the security of income, with option periods allowing Woolworths to potentially remain at the site until 2064.
“The fact that you’ve got such a secure tenant in place played a big role as well, so he was definitely attracted to the blue chip nature of the property,” he said.
He said if the lease wasn’t tied up with option periods, other major supermarkets would have “loved” to occupy the space.
“The interesting thing with the Yarra Ranges… we sold Yarra Junction shopping centre a few years ago, anytime you’re selling property up this way, because of the topography of the area you’re so landlocked.
“It’s hard to find a 700 square meter commercial 1 zoned owned site where you can build a supermarket because of the nature of the area.
“It makes sites like this so rare.”
Although there are a lot of headwinds in the market, Hawthorne said, getting this kind of depth of buying interest not just from the international market but a lot of local private investors, goes against the narrative that property prices are coming down.
He said the agency achieved a four and a half per cent benchmark yield for the property – well under the cash rate.
“It certainly speaks to the level of appetite to well positioned blue chip properties like the Woolworths in Monbulk,” he said.
“A few groups who are the top end of the big table, they didn’t place much emphasis on the actual scale of the land holding, due to limited scope for development upside.
“It was interesting that a lot of them were attracted to the net lease structure and the secure lease term.”
According to Hawthorne, the new owner of Monbulk Woolworths is set to purchase commercial properties across metropolitan Melbourne and the Yarra Ranges when he moves to Australia in the short to medium term.
Monbulk’s Woolworths site was previously owned by a private investor based in Melbourne.
