Coles Group Property Developments has put its Aurora Village neighbourhood centre in Melbourne’s north on the market as both institutional and private investors drive near record retail transaction volumes, particularly in Victoria.

The recently completed neighbourhood centre offers investors a double supermarket anchor with Coles and Aldi tenancies both located in the Village.

The centre returns more than $2.5 million per annum from its tenants, Coles (15 year lease) and Aldi (10 years), together comprising 73% of the centre’s 8,284m2 NLA – 16 specialty stores and a Coles Express Service Station (10 years).

Located at Epping – a key growth suburb of Whittlesea, one of Australia’s fastest growing municipalities – the 23,265m2 Town Centre zoned property comprises two titles including the 21,880m2 shopping centre site, and the 1,385m2 Coles Express site.

According to CBRE Associate Director Research, Kate Bailey, national retail property sales in the 12 months to June totaled $10.9 billion – up 30% on the previous 12 months – with shopping centre sales up 86% year-on-year and accounting for $6.8 billion or 62% of the total.

CBRE National Director Investments, Mark Wizel, who is managing the sale with Victorian State Director Retail Investments, Justin Dowers, said there were a number of factors which had put retail back on the investment radar.

“There had been the perception in the market that online trade would significantly damage bricks and mortar assets and that sentiment, along with strong competition from the office market, was reflected in sales volumes last year.

But centre managers have responded well to the challenge, primarily on the back of a new entertainment and services based tenancy mix, and consumers have shown a liking for the new mix which is reflected, anecdotally, in higher foot traffic, and the steady improvement in retail trade figures.

Astute investors are also well aware that wages growth, and an increase in consumer spending power, will be an inevitable consequence of continued strong employment numbers, indeed trade figures suggest that is already happening,’’ Wizel said.

ABS data shows Australian retail turnover rose 3.2% in July 2018 compared with July 2017, while CBRE Research reports Australian consumer confidence rose 3.9% in July to register 106.1, the strongest result since November 2013.

ABS data also revealed that since last August (2017), the trend unemployment and underemployment rates have both fallen and as a result, under-utilisation in Australia is at its lowest level since late 2013.

Dowers said the high percentage of income from the double supermarket anchor tenants creates a highly secure investment, however, it is the income growth potential that sets this centre apart.

“Coles Aurora Village has a number of elements that will promote income growth. The net lease structure to Coles and attainable percentage rent threshold will promote rental growth in the near future, while the ALDI lease provides annual rent increases and the conservative specialty tenant rental levels will maintain healthy growth rates as the centre continues to attract a disproportionate share of customers within the rapidly growing catchment area.

The best is yet to come for this centre. There are a number of infrastructure projects occurring in addition to continued housing development in the dedicated catchment area that will only make it more convenient for more customers to shop,’’ Dowers said.

He said along with the Coles (15 years with 4 x 10 year options), Aldi (10 years with 2 x 10 year options) and Coles Express tenancies, the centre was also home to a medical centre, pharmacy, Degani, and Anytime Fitness which creates a well rounded and complimentary convenience shopping environment.