Coles supermarkets ar attracting strong interest from investors. Picture:Toby Zerna
Supermarket giant Coles is looking to tap into strong investor demand for everyday shopping assets by putting a $250m property portfolio on the market.
The offer leads a late-year run of retail offers, including billionaire Wes Maas’s listed group selling The Village Southlakes, a new neighbourhood centre anchored by Coles and Liquorland in the NSW centre of Dubbo.
Coles is quietly offering half a dozen neighbourhood shopping centres in Western Australia, Victoria, Queensland and NSW as it aims to capitalise on demand for convenience assets.
The off-market offer is being handled by CBRE’s Simon Rooney and Joe Tynan, but the agency and the supermarket chain declined to comment on the details.
There has been a run of large portfolio trades this year. Rival supermarket chain Woolworths sold a portfolio of 10 neighbourhood centres worth more than $500m to Asian investment group Forest Endeavour. Shopping centres are in high demand. Public and private investors are chasing the income certainty they offer in volatile times.
Funds managed by industry-superannuation fund-backed IFM Investors also bought a shopping centre portfolio to be developed and built by Victorian developer Oreana, which has an end value of about $300m.
Buyers of supermarket-anchored assets this year have ranged from Charter Hall, which is stocking up its $3bn-plus convenience retail fund, to HMC Capital, which has bought in Sydney and Melbourne.
Coles is also refilling its coffers after making several property moves. In August, it bought a complex occupied by Woolworths in Albion Park in the Illawarra region of NSW for about $57m.
ASX-listed MAAS Group is selling The Village Southlakes, partly as it focuses on its interest in data centre developer Firmus Technologies, in which it has a stake of about 3.2 per cent. Mr Maas is reported to have a similar holding, with the coming float to result in a jump in value, although the company’s proposed $43bn may be under pressure.
Sebastian Fahey and David Mahood of JLL are handled the supermarket. It is also part of larger housing estate, and it serves the 1900-dwelling Southlakes project. Anchored by a new 10-year lease to Coles and Liquorland with options out to 2066, it generates about $3m annually.
Mr Maas said the complex showed the group’s commitment to delivering premium amenity to regional communities. “This purpose-built development provides essential retail services at the heart of the region’s largest master-planned estate,” he said.
Others are also racing to market. An unlisted Kyron Capital-managed fund is selling Tweed Mall, via McVay Real Estate and Colliers. The 23,420sq m subregional, anchored by Woolworths, Coles, Aldi and Target, could garner about $100m, partly as it carries concept approval for a $900m mixed use redevelopment.
Acure Asset Management has tapped Stonebridge Property and Colliers to sell NorthWest Plaza in Queensland and The Village Australind in WA, with hopes they will reap $110m in total.
In Queensland, NorthWest Plaza in Brisbane’s north has 9696sq m of retail space on a 3.08ha site. It is anchored by a full-line Woolworths supermarket, one mini-major, 21 specialty retailers and three pad sites.
The Village Australind is a dual-supermarket Coles and ALDI-anchored neighbourhood centre complemented by three mini-majors, specialty retailers and food and beverage outlets. The 9285sq m centre is on a 3.51ha site, and it can be expanded.
Colliers said there had been $739m invested in neighbourhood centres in the past quarter, as they were chased by investors wanting assets underpinned by non-discretionary spending and top supermarket brands.