Investor buys Woolworths Narrabri supermarket site

Woolworths Narrabri supermarket has a new owner.

The property sold for $16,500,000 in an off-market transaction managed by Savills’ agents Peter Tyson and Jon Tyson on behalf of Whistle Funds Management to an undisclosed Melbourne-based private investor.

The choice of Narrabri as a desirable long-term investment destination by investors who have myriad choices is a vote of confidence in the anticipated continuing growth of Narrabri and the district.

“The deal was struck at a yield of 4.4 per cent representing a tight result for regional NSW and a sale rate of almost $5900 per square metre,” Savills national director Peter Tyson commented.

“The targeted off-market process generated offers from numerous bidders and was dominated by savvy private investors.”

The property has a remaining lease term at the time of sale of 8.7 years plus two 10-year options.

Originally developed in 2005 the 2800sqm standalone supermarket has a land area of 6160sqm and onsite parking for 83 cars.

“The ownership profile of many standalone supermarkets nationally is dominated by high-net-worth private investors, typically domiciled in Melbourne and Sydney,” said Mr Tyson.

“Many of these groups own multiple supermarket holdings.

“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,” said Mr Tyson.

Stand-alone supermarkets remain in favour with private investors.

“The most active buyer profile of the increasingly popular freestanding supermarket asset class has long been the agile private investor fraternity,” said Mr Tyson.

“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”.

Narrabri has been identified as one of a handful of NSW regional growth centres and is seeing a steady influx of investment from businesses and individuals.