Whistle Funds Management has sold a Woolworths supermarket in the NSW regional town of Narrabri for $16.5 million, representing a 4.4% yield.
Built in 2005, the 2,800 sqm standalone supermarket featured had a remaining lease term of 8.7-years, plus two 10-year options.
Narrabri is the administrative heart of the second richest agricultural region in Australia, located 520 kilometres from Sydney in northwest NSW.
The property also comprised a land area of 6,160 sqm and onsite parking for 83 cars.
Savills’ agents Peter Tyson and Jon Tyson managed the off-market transaction.
“The most active buyer profile of the increasingly popular freestanding supermarket asset class has long been the agile private investor fraternity,” Savills National Director Peter Tyson said.
“Typically, these assets are tightly held and thinly traded, favoured by investors for the ‘bond-style annuity’ characteristics underwritten by genuine long term lease commitments and high-quality tenant covenants such as Woolworths and Coles.”
Savills Director Jon Tyson said the ownership profile of many standalone supermarkets nationally was dominated by high-net-worth private investors, typically domiciled in Melbourne and Sydney.
“Many of these groups own multiple supermarket holdings. The successful buyer of Narrabri was Melbourne based,” Tyson said.
“Supermarket retailers invariably seek to secure long term leasing rights which, including options terms, can run for 50-60 years.
“These long-term commitments by essential service providers are amongst the longest-lived leases in the marketplace.”
The deal comes after Whistle Funds sold the Highfields Plaza neighbourhood mall near Toowoomba, Queensland for $16.3 million earlier this month.
Recent retail sales in NSW include Woolworths Group’s sold of a neighbourhood shopping centre in Newcastle to Centuria Capital Group for $60.25 million earlier this month, while Exceed Capital bought the Boambee Central neighbourhood shopping centre near Coffs Harbour for $12.8 million.