A PRIVATE investor from the Sunshine State has purchased a freestanding IGA supermarket at 52-56 Yandilla Street in Pittsworth as it successfully sold under the hammer for $4,168,500.
The opportunity was underpinned by a 10-year lease that had approximately nine years and one month remaining on the lease term.
The asset was marketed and sold by Ray White Commercial QLD Retail Investment Sales duo Lachlan O’Keeffe and Michael Feltoe.
“The building was purpose-built 14 years ago for IGA with around 35 car parks and additional on-street provisions. The sale reflected a 6.43 per cent yield with just over 130 enquiries and eight registered bidders on auction day,” Mr O’Keeffe said.
“During the auction, there were a total of 19 bids starting at $3,200,000 and then selling for $4,168,500.
“The auction was very competitive with an interstate private investor and Queensland-based private investor battling it out to the end with the final bids in $100 increments. This was a positive indication that every dollar had been achieved for the seller.
“This was the first freestanding IGA in Queensland to be publicly marketed and sold in the last three years.
“Supermarkets have been held in high regard since the beginning of the COVID-19 pandemic, with most investors overwhelmingly seeing the security of this asset class as not only essential but the centrepiece of any community.”
“Franchised IGA supermarkets in regional locations have traditionally sold in that seven to nine per cent yield range and this sale at 6.43 per cent sets a new benchmark for a franchised regional IGA,” Mr Feltoe said.
“Prior to commencing the marketing campaign, we sent an email to our database with one photo stating that we were about to start marketing for sale a freestanding IGA with a 10-year lease.
“Within one hour of this, we had 54 groups register their interest early and within two days, this increased to 78.
“This result clearly reinforces that there’s a significant level of pent-up demand for freestanding IGA supermarkets and shopping centres with IGA as an anchor tenant.”