Warrnambool's Lava Street Coles building sold

WARRNAMBOOL’S Lava Street Coles building has been sold under the hammer for $14 million, an international real estate company has confirmed.

CBRE Victorian retail investment properties negotiator agent Joseph Du Rieu said the freestanding site had sold at the company’s inaugural premium property portfolio auction at its Melbourne office.

It was the second time the prime real estate building was offered for sale since it underwent a redevelopment in 2008.

CBRE agents Justin Dowers, Mark Wizel and Mr Du Rieu were appointed to sell the building on behalf of a Melbourne-based private investor.

Six other investment properties were also sold on the night, with total sales of more than $100 million recorded.

Long-time Warrnambool real estate agent Brian Hancock, from Brian O’Halloran and Co., said the sale was good for the city.

“It puts confidence back into the CBD,” he said.

“It’s a good, solid sale. It would have to be one of the highest prices in the CBD to date.

“I think it’s a stamp of approval for Warrnambool.” 

There were 300 people at the auction, with 63 registered Victorian, interstate and overseas bidders.

Mr Dowers said demand for premium single tenanted retail investments had reached an unprecedented level. 

“Single tenanted retail investments with long term leases to the likes of Coles and Woolworths are seen as real blue chip opportunities,” Mr Dowers said.

The Warrnambool building was previously offered for sale in 2002 for $4.25 million, but that building was demolished and a new store developed.

Lascorp Development Group constructed a two-storey building costing $6.5 million.

The property was offered for sale with a 20-year initial lease term to Coles, with options to extend until 2048. 

Net lease yearly income is about $803,000.

The property has a 40-metre frontage to Lava Street and a secondary access point from Kepler Street, providing access to 153 on-site car parks. 

The site is 2670 square metres in size.

Other supermarket building sales have commanded high prices, including Woolworths Launceston at $22.5million, Woolworths Moe at $14 million and Coles Launceston at $9.75 million.