Boundary indicative only

For Sale by PUBLIC Expressions of Interest
closing Thursday 1st April 2021 at 5pm (AEDT)

A dominant NET LEASE Coles Supermarket, Liquorland and 4 shops with outstanding income growth potential in a thriving regional Victoria location.

Contents

Introduction 4
Executive Summary 6
Investment Highlights 7
Location 8
Site Details 14
Property Description 16
Tenant Profile 18
Financial Summary 22
Sale Process 26
Disclaimer 29

The Offering

Stonebridge Property Group is pleased to present for sale Coles Swan Hill Shopping Centre, a unique opportunity to acquire a highly strategic and strong trading Victorian neighborhood shopping centre. The Shopping Centre is anchored by a dominant Coles Supermarket and is complemented by a Liquorland and 4 specialty shops. The Coles Supermarket has a sustained track record of sales growth and provides investors with a rare mix of income security and growth potential.

Coles Swan Hill Shopping Centre occupies a prime town centre position at the heart of the Murray River Region, a booming agriculture, tree change and domestic tourism destination.

The key highlights of this unique opportunity include:

  • Coles, Liquorland + 4 shops over a total lettable area of 3,452 sqm*
  • 85%* of gross rent is secured to Coles and Liquorland on net leases
  • Dominant Coles supermarket: 40% in excess of benchmarks and in excess of turnover rent threshold
  • Outstanding income growth potential, with a Coles rent review due in Aug-21
  • Low average gross specialty rentals of $565 per sqm* with annual rental reviews
  • 8,203 sqm* Commercial 1 Zoned site in a prime town centre position with convenient at-grade parking for 142* cars
  • Booming agriculture and domestic tourism location at the heart of the Murray River Region of Victoria
  • Estimated net income of $1,079,000 per annum^

Coles Swan Hill Shopping Centre sale by Expressions of
Interest (EOI) closing 5pm AEDT on Thursday 1st of April 2021.

Justin Dowers
Partner
+61 438 098 805
jdowers@stonebridge.com.au

Kevin Tong
Director
+61 422 848 818
ktong@stonebridge.com.au

Phillip Gartland
Partner
+61 403 582 324
pgartland@stonebridge.com.au

1 Jan-21 MAT (excl. GST) on $/sqm basis compared to Macroplan benchmark
All figures in this document are approximate only
*Approximate
^ Includes Aug-21 percentage rent forecast

Executive Summary

Property & Address Coles Swan Hill Shopping Centre
140-170 Beveridge Street, Swan Hill VIC 3585
Corner of Beveridge Street & McCrae St
Property Type Neighbourhood Shopping Centre
Title Reference PC3604141
Site Area 8,203 sqm2
Zoning Commercial 1 Zone3
Description Swan Hill Shopping Centre comprises a convenience-based neighbourhood shopping centre anchored by a dominant Coles supermarket (2,913sqm*), and supported by a Liquorland and 4 specialty shops. It is a highly accessible centre and provides convenient at-grade parking for 142 cars.
Location Swan Hill is a suburb located in the Heart of the Murray River Region. Swan Hill is located approximately 188km* North West of Bendigo and 339km* North-West of the Melbourne CBD. The region has a booming horticultural and agricultural practice, and strong domestic tourism industry4.
Net Income $1,079,000 per annum^
Car Parking 142 Car Spaces (1 space per 24.3 sqm of lettable area)
Method of Sale Expressions of Interest (EOI) closing 5pm AEDT on Thursday 1st of April 2021

Secure Income Profile

1 Mecone Mosaic
2 Price Merrett Consulting, Plan of Subdivision
3 Victoria State Government
4 Remplan, Swan Hill Economy Feb 21
^ Includes Aug-21 percentage rent forecast

Investment Highlights

1Jan 21 MAT (excl. GST) on $/sqm basis compared to Macroplan benchmark

Location

Coles Swan Hill is a strategically located within the heart of Swan Hill’s retail precinct and on the South bank of the Murray River. It is approximately 188km* North West of Bendigo, on the border of Victoria and New South Wales, and represents the largest city in the Swan Hill Rural City region1.

Swan Hill has diverse economic drivers and is known for its booming agricultural practices, close proximity to tourist destinations and country charm. The Centre lies within the commercial and community core and is in close proximity of schools such as Swan Hill South Kindergarten, Swan Hill North Primary School, Swan Hill College and St Mary MacKillop College.

Swan Hill is located on the Murray Valley Highway, which has direct access to Echuca, Albury and Mildura. Additionally, the Loddon Valley Highway links Swan Hill to Bendigo in the South.

Bendigo V-Line

Coles Swan Hill Shopping Centre is strategically located in a highly connective area. It is in close proximity of the Swan Hill Railway V-Line railway station. The V-Line grants direct access to Bendigo and the Melbourne CBD, making Swan Hill highly accessible.

Tourism

The Swan Hill region is located in close proximity to many natural attractions and the economy benefits from visitors drawn to spots such as the Murray River, the Riverine forests and Mallee landscapes. Around 656,000 people visit the municipality each year, injecting about $55 million into the local economy1.

Furthermore, for the first time ever, visitor expenditure in the Murray region exceeded $2 billion in 2019, an increase of 11.5% from the previous year. A record 6.5 million people visited the region and stayed an unprecedented 11 million nights2.

“The Murray offers an amazing array of experiences including culinary, nature, arts, culture and events, and we encourage people to get out and experience the diversity of the region”

Murray Regional Tourism Board Chair
– Wendy Greiner

“These results are outstanding for the region and reflect the high quality of our experiences, product offerings and events across the region.”

1 Swan Hill Rural City Council Plan 2017-2021
2 Murray Regional Tourism, 2020

Thriving
Economy

The Swan Hill municipality has experienced significant growth over the past decade, driven by the rapidly expanding horticultural and agricultural practices and supported by an innovating manufacturing sector. This success is portrayed by the fact the region is now Australia’s largest producer of table grapes, pistachios and olives, the second largest producer of wine grapes in Victoria and accounts for 70%* of Australia’s almonds and olive oil production1.

With increasing demand for agricultural goods, the region has been able to steadily increase gross regional product over the past 6-7 years.

Gross Regional Product

House Prices

Swan Hill is currently experiencing rapid median house price growth. The growth is driven by a range of factors including relative affordability, a scenic location, booming economy and improving infrastructure. The area has become an increasingly desirable residential, lifestyle and employment destination.

1 Remplan, Swan Hill Economy Feb 21
2 Swan Hill Rural City Council, 10 Year Major Projects Plan

10 Year Major Projects Plan for 2021/22 to 2030/31

Over the next 10 years, the Swan Hill Rural City Council has proposed a range of major projects with an end value of $305 million.

Being the economic hub of the region, Swan Hill is receiving significant investment from local governments and some of the major projects located near Swan Hill Shopping Centre are2:

Construction of new Municipal Offices in Swan Hill $22 million
Increasing Housing Supply Swan Hill $12 million
Construction New library Building Swan Hill $3 million
Swan Hill Tower Hill Residential Development $28 million
Swan Hill Showgrounds – Regional Hub $5 million

Position

Coles Swan Hill Shopping Centre is strategically positioned on the corner of Beveridge Street & McCrae Street, in the heart of the main retail precinct of Swan Hill.

The Centre benefits from multiple street frontages forming a high profile site, which receives high exposure to passing local and commuter traffic. The Centre, along with Campbell Street shopping strip, forms a key retail shopping precinct which effectively serve the weekly food, grocery and convenience-orientated shopping needs of the residents in surrounding areas.

Coles Swan Hill Shopping Centre boast an irreplaceable town centre position, with outstanding exposure and excellent parking provision.

Site Details

Address 140-170 Beveridge Street, Swan Hill
Lot and Plan No. PC3604141
Site Area 8,203 sqm2
Zoning The site is zoned Commercial 1 Zone (C1Z) pursuant to the Victorian State Government
Frontages Beveridge Street: 101m*
McCrae Street: 50m*

1 Mecone Mosaic
2 Price Merrett Consulting, Plan of Consolidation
* approx

Property
Description

The Building

Coles Swan Hill Shopping Centre is a convenience based centre with a Coles, Liquorland and four specialty shops.

The Centre’s layout has been designed with the supermarket and adjoining liquorland being the central feature, and the four specialty shops being neatly located on the eastern side (when facing the front of the centre).

All shops are externally facing the at grade car park with no common mall.

Coles Supermarket 2,913 sqm
Liquorland 195 sqm
Malaysian Café (Hanna Lesung Batu) 86 sqm
Your Regional Butcher 84 sqm
Lenard’s 80 sqm
Bakers Delight 94 sqm
Total 3,452 sqm

Car Parking

Located directly in front of the supermarket and specialty shops is the 142 at grade car parks. The owners recently invested in a car parking system to monitor parking activity and generates income through a ticketed system. The centre also benefits from a strong provision from council car spaces concentrated around the site.

Financial Summary: Secure Income with Growth Potential

Lease Summary

The following summary provides a general overview of the major tenant lease. Interested parties must undertake an independent assessment of the all leases and associated documents in the online data room.

Lessee Coles Supermarkets Australia Pty Ltd
Area of Premises 2,913sqm
Commencement Date 13-Aug-96
Lease Term 31 Years
Expiry 12-Aug-27
Remaining Options 1 x 10 Years
Current Base Rental $603,148 pa
Rent Review Frequency 5 Yearly (next review Aug-21)
Rent Review Structure One third (1/3) of the total of Base Rent and Percentage Rent payable during the last three Lease Years of the preceding Rent Period
Outgoings Recovery The Lessee shall contribute its Proportion of the Operating Expenses for each Accounting Period as well as Car Park Operating Costs. Refer to Lease for full definition.
Percentage Rent The amount by 1.5% of the Lessee's Gross Sales for each Lease Year exceed the Threshold Amount.
The Threshold amount is the Gross Sales for the Lease Year immediately preceding the start of that Rent Period that is, for the fifth Lease year in each preceding Rent Period).

Tenant Profile

Coles Group

The Coles Group is an ASX-20 listed Australian supermarket, retail and consumer services company. Founded in 1914, it operates more than 800 supermarkets and 2,500 retail outlets nationally. Coles’ 110,000+ employees deliver quality, value, and service to the 21 million customers who shop with them each week.

1H21 Financial Highlights1

Total Sales Revenue +8.1% vs. ($20.4bn)
Liquor Sales Revenue +15.1% vs (1.95bn)
Express Sales Revenue +10.1% vs (632m)
EBIT +12.1% vs. ($1,020m)
Net Profit After Tax +14.5% vs. ($560m)

Coles Swan Hill: Sustained Turnover Growth

1Percentage change compared to prior corresponding period

Net Income Estimate

Coles Swan Hill Shopping Centre is estimated to generate a net operating income of $1,079,000 per annum as summarised below.

Disclaimer

All interested parties must make their own investigations and assumptions in relation to current and future outgoings for the Property. Actual amounts may differ from the estimated amounts.

The information in the above net income estimate has been provided by 3rd parties and whilst prepared in good faith, any projections or analysis represent estimates only and may be based on assumptions which, while reasonable, may not be correct or accurate and are not representations of future matters. Actual results may vary from projected result.

1 https://www.sro.vic.gov.au/, Regional Commercial, industrial and extractive industries property concession

Sale Process: Expressions of Interest

Method of Sale

Coles Swan Hill Shopping Centre is for sale by Expressions of Interest (EOI).

EOI close Date

Thursday 1st April 2021 at 5pm (AEDT).

EOI Requirements

Expressions of Interest are not required to be lodged in any prescribed form, however as a minimum, must include the following information:

  1. Name of the interested party, together with the Principals supporting the interested party and any details of the holding company or entity if the interested party is a subsidiary of part of that group of companies;
  2. The purchase price of a 100% interest in Coles Swan Hill Shopping Centre, together with proposed deposit, settlement and any conditions of purchase, including internal and external approval processes;
  3. Work undertaken to date and due diligence time required (if any) to finalise a transaction;
  4. Settlement period;
  5. A list of consultants including the purchaser’s solicitor; and
  6. Full details of the interested party’s capacity to complete the transaction in a timely manner.

In submitting an expression of interest, all parties acknowledge and agree that the vendor specifically reserves the following rights:

  • To accept or reject any Expression of Interest in its absolute discretion, including the highest Expression of Interest made and without having to attribute reasons or to be accountable in anyway;
  • To extend the closing date for submissions of Expressions of Interest;
  • To discuss any matter and to deal with any parties submitting an Expression of Interest at any time before or after the closing date;
  • Not to be contractually bound in any way by the submission of any Expression of Interest; and
  • Not to sell the Property

Due Diligence

To access further due diligence information, parties are required to complete and sign the Confidentiality Agreement to be granted access to the Online Data Room.

Contact

To obtain further information or to arrange an inspection, please contact the exclusive selling agents Stonebridge Property Group.

Justin Dowers
Partner
+61 438 098 805
jdowers@stonebridge.com.au

Kevin Tong
Director
+61 422 848 818
ktong@stonebridge.com.au

Phillip Gartland
Partner
+61 403 582 324
pgartland@stonebridge.com.au

Disclaimer

This document has been prepared by Stonebridge Property Group for the purpose of providing information to potential purchasers. It is provided on a strictly confidential basis and is not to be distributed or reproduced in whole or in part without the prior written consent of Stonebridge Property Group.

Stonebridge Property Group and its clients assume that any person who reads or uses this document is capable of evaluating the merits and risks of any investment or other decision with respect to a property transaction, its sustainability and its financial, taxation, accounting and legal implications without any reliance on this document. Any potential purchaser or any other interest party should make their own independent investigations and analysis of the property and obtain independent financial, taxation, accounting, legal and other advice to assist them in making their own decisions and assessment appropriate to their circumstances.

This document does not purport to contain all the information that a potential purchaser or any other interested party may require. It is intended to be used as a guide only and does not constitute advice, including without limitation, investment or any other type of advice. The information contained in this document does not constitute any invitation, tax or legal offer or contract, including for sale or otherwise. It does not take into account the individual circumstances, financial situation, investment objectives or requirements of a potential purchaser or any other person.

This document may contain information prepared by third parties. Figures, calculations and other information contained in this document that has been provided to Stonebridge Property Group by third parties have not been independently verified by Stonebridge Property Group. Any projections or analysis represent estimates only and may be based on assumptions which, while reasonable, may not be correct and are not representations of future matters. Actual results may vary from projected results and variations may be material.

Users should not rely on any information contained in this document as a statement or representation of fact and must make their own enquiries to verify and satisfy themselves of all aspects of such information including without limitation, any income, rentals, dimensions, areas, zoning and permits. While the information in this document has been prepared in good faith and with due care, no representations or warranties are made (express or implied) as to the accuracy, currency, completeness, suitability or otherwise of such information.

The vendor, Stonebridge Property Group and its clients, officers, employees, sub-contractors and agents shall not be liable (except to the extent that liability under statute or by operation of law cannot be excluded) to any person for any loss, liability, damage, or expense arising directly or indirectly from or connected in any way with any use or reliance on such information. Neither the vendor nor Stonebridge Property Group accept responsibility for any loss or damage howsoever occurring resulting from the use or reliance on the information by any person.