The tightest Victorian yield of 2019 has been achieved in the sale of a standalone Coles supermarket in south-east Melbourne.

The property at 81 Mentone Parade property was bought by a Chinese investor for $15.3 million on a 3.4 per cent yield, the best vendor yield since Coles Clayton sold on a 2.57 per cent yield in March 2018.  

CBRE Director of Investments, Mark Wizel, who managed the sale with Justin Dowers and Kevin Tong, said enquiry had been "through the roof", leading to a hotly contested auction.

At a glance:

• A Coles supermarket in Mentone, Victoria has sold at auction for $15.3 million, reflecting a yield of 3.4 per cent.
• The property at 81 Mentone Parade comprises a freestanding, internally refurbished, 2854 square metre (GLA) supermarket leased to Coles at a current net rental of $519,785 per annum. 
• The sale was managed by Mark Wizel, Justin Dowers and Kevin Tong from CBRE.

"Standalone supermarkets are standout performers in pretty much any market," he said.

"When you add a 10x10 year lease to Coles and long-term development upside, in a sought after bayside locale, the property is going to sell well.

"What has been added to the mix is the fact that opportunities to buy these so-called recession-proof assets are so thin on the ground and that was absolutely underlined by the fact that we had two investors from mainland China fly in just for this auction."

The property comprises a freestanding, internally refurbished, 2854 square metre (GLA) supermarket leased to Coles at a current net rental of $519,785 per annum. 

Mr Dowers said demand for the asset was also bolstered by the property’s long term value-add and development prospects.

"More and more we are taking enquiries from prospective buyers with questions on zoning, site access and population growth forecasts," he said.

"The recognition of long-term, value-adding with metropolitan retail opportunities is the new black with what had been a relatively passive retail investor cohort, and it has swelled their ranks."

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