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Posted on 15 November 2021

A FREESTANDING Woolworths asset in Melbourne’s east has sold under the hammer for $45.7 million, setting what is believed to be a record price, while trading under the 3% yield mark.

The eastern suburbs have become a magnet for ultra-tight supermarket sale yields over the past month, with record yields of 1.9% set in Hawthorn and of 2.46% in Blackburn South.

Friday’s auction of 383 Whitehorse Road in Balwyn was attended by over 150 people at Leonda by the Yarra with 20 parties registering to bid.

Vinci Carbone’s Frank Vinci and Joseph Carbone managed the sales process.

Woolworths has a 20-year lease until 2033 with eight options of five years each. The sale price represented a yield of 2.99% on the annual rent of over $1.365 million.

The freestanding building of 2,848 sqm was constructed in the 1970s and refurbished in 2013 as Woolworths took on its new lease. It has recently undergone a facelift and the supermarket recently kicked off a full internal re-fit at an expected cost of over $3 million.

There is a separate BWS liquor tenancy and the premises has been fitted out to accommodate the Woolworths supermarket. On site are 87 car parks, with more parking in a council car park at the rear.

Staff amenities are located on the lower level and management offices are on the ground level.

Vinci said, “we believe that the buyer has picked up one of the best pieces on inner east real estate in existence”.

“It is very difficult to come across over one acre of commercial 1 zoned land in the heart of such a strong shopping strip."

“The yield of 2.99% is considered to be quite low, however given the current interest rate climate it’s better than having cash in the back.”

A freestanding Woolworths supermarket at 117-235 Canterbury Road in Blackburn South sold last month for $29.3 million. Westrent Properties picked up the 3,495 sqm supermarket at 117-125 Canterbury Road from the Kluger family.

That property has nine years remaining on its lease and is situated on a 7,298 sqm parcel with 145 car parks.

More recently, the Kiel family sold a Coles supermarket at 699 Glenferrie Road in Hawthorn for $24 million. The 1.9% yield has set a new benchmark.

Both deals were struck off-market.