Retail giant Coles will divest its newly developed Coburg North Village shopping centre into a property market starved of retail assets and fuelled by historic low interest rates.
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Coles' development arm opened the new-format supermarket on the corner of Gaffney and Sussex streets in Melbourne's north in August last year along with 15 speciality stores leased to various businesses including a medical centre, pharmacy, gym, Subway store and cafe.
The supermarket giant appears to have chosen an opportune time to pitch the neighbourhood shopping centre to investors with few similar assets being offered this year.
It follows the listing this week of another major retail asset, MAB Corporation's service station and convenience store complex on the West Gate Freeway, which is expected to sell for around $25 million.
The Shell service station includes a Coles Express, Hungry Jack's and Red Rooster with 15-year leases returning total net income of $1.41 million.
About 180,000 vehicles a day drive past the complex at the city end of the West Gate Bridge, according to selling agents Savills Australia and Dawkins Occhiuto.
The 18,560 square metre shopping complex in Coburg North is anchored by a new-format Coles supermarket and Liquorland, also on 15-year leases, and returns income of $1.9 million a year, said Savills Australia's Pat De Maria and Tom Forrest, who have been appointed to handle the sale.
Mr De Maria said low interest rates and limited availability of non-discretionary retail assets were likely to drive strong national and offshore interest.
"There hasn't been many of these come up. This is one of the best neighbourhood centres offered in the last five years," he said.
Few stand-alone supermarkets and neighbourhood centres have been offered for sale this year with the level of market activity slumping as investors hold onto landmark properties rather than sell in a low interest rate environment.
The last Victorian neighbourhood centre to change hands was Bundoora Square shopping centre in Melbourne's northern suburbs, which sold on a tight 6.2 per cent yield.
Equivalent pricing would put a value on Coburg North Village of more than $30 million.
Bundoora Square was purchased by developer Five Squared for $26.5 million from CoINVEST, the trustee administering the portable long-service leave scheme for Victoria's construction industry.
