St Albans Woolworths sells for $7.24 million
The Woolworths St Albans supermarket in Melbourne’s north west has sold at auction to a private investor for $7.24 million, significantly above expectations, demonstrating the appeal of suburban shopping centres anchored by Woolworths or Coles.
The sale reflects a yield of 5.7% on annual rental of over $481,000
More than 100 bids were submitted.
Agents Kliger Wood Real Estate and TBM Commercial, who marketed the store, had expected a price around the $6 million mark
Kliger Wood director Eugene Wood says the supermarket offered investors long-term income security with a leading national retailer as the sole tenant.
“The St Alban’s store is a strong performer having recorded consistent annual sales growth since 2006.
“The property was also extensively refurbished about five years ago and services a growing residential area from a prominent and easily accessible site.
“We were expecting offers in the region of $6 million as commercial investments of this scale and sole tenancy profile will attract the attention of larger private investors or superannuation funds.”
Woolworths is the sole tenant on the 6,348 square metre property located within a Business 1 zone and in close proximity to the St Albans railway station and a major bus interchange. It includes a liquor outlet which has a building area of 2,520 square metres.
The lease which is to Woolworths Limited commenced in June 2004 for a 15-year term plus 10-years, followed by four further option terms of five years, which would provide a lease currency until June 2049.
There is a base rent payable monthly in advance which is currently set at $472,183 gross with a turnover rent which is calculated at a reducing percentage per benchmark levels of retail turnover.
The turnover rent is also subject to a review calculated every five years to the average of the previous three years base rent plus turnover rent.
The breakeven point for the turnover rent is currently set at $23,609,184 and the turnover rent contribution in the financial year ended June 30, 2011 was $9,352.
