Ritchies Supa IGA Yarra Glen - Realestate.com.au

Ritchies Supa IGA 

Yarra Glen 

Information Memorandum 

For Sale by Tender 

Closing Friday 29 October 2010 at 4 pm

Ritchies IGA, Yarra Glen 

Contents 

1 Executive Summary 2 

2 Opportunity 4 

3 Location 5 

4 Market Overview 6 

5 Tenant Details 12 

6 Building Description 15 

7 Sales Process 16 

8 Disclaimer 17 

Appendix I - Depreciation Schedule 

pg. 1

107-115 Manningham Street, Parkville 


1 Executive Summary 

Property for Sale 

38-40 Bell Street, Yarra Glen 

Artists Impression 

General Description 

The Property comprises a new, single level, enclosed Ritchies 

Supa IGA Supermarket. 

The property commenced trading in December 2008. 

Lease Term 

Twenty (20) years 

Further Term 

Two further terms of Ten (10) years each 

Floor Area 

The area of the Supermarket is approximately 2,600 square metres 


Tenancy Profile 

The property is leased to Ritchies Supa IGA Pty Ltd and trades as 

a Supa IGA, and the lease is guaranteed by Metcash Trading 

Limited 

Current Passing 

Income 

Current rental is approximately $594,780 per annum plus GST 

Location 

Located in the Yarra Valley close to Lilydale and Chirnside Park 

Title Details 

Being part of the land described as lots 1 on Proposed Plan of 

Subdivision PS 639783A and being part of the land contained in 

Lot G on Plan of Subdivision 427454D and therefore being part of 

the land more particularly described in Certificate of Title Volume 

10712 Folio 291. 

Zoning & Council 

Business 1 Zone under the Planning Scheme of Yarra Ranges 

Method of Sale 

For sale by Public Tender closing Friday 29 th October 2010 at 

4.00pm 

This summary is to be read in conjunction with and forms part of the complete report



Further Information 

To obtain a copy of the tender documents, contract or access to due diligence, please 

contact either of the joint exclusive agents: 


GROSS WADDELL 

FITZROYS 

Level 6 Level 29 

172-192 Flinders Street 367 Collins Street 

MELBOURNE VIC 3000 MELBOURNE VIC 3000 

Michael Gross, Director 

Marc Leiba 

Telephone: (03) 9654 8666 Telephone: (03) 9275 7777 

Mobile: 0419 355 561 Mobile: 0418 173 661 

mgross@grosswaddell.com.au 

leibam@fitzroys.com.au 


Andrew Waddell, Director 

Keith Murray 

Telephone: (03) 9654 8666 Telephone: (03) 9275 7777 

Mobile: 0419 400 991 Mobile: 

awaddell@grosswaddell.com.au 

murryk@fitzroys.com.au 

Artists Impression



2 Opportunity 

Gross Waddell and Fitzroys are pleased to offer Ritchies Supa IGA for sale through a Public 

Tender campaign closing Friday 29 th October 2010 at 4.00pm. 


In the current economic environment Ritchies Supa IGA ‘ticks all the boxes’. 

Key features of the property include: 

 

 

 

 

new 20 year lease 

it offers a well located property 

a quality full line Supermarket as the anchor tenant 

substantial depreciation benefits 


The offering of Ritchies Supa IGA is an opportunity for investors to acquire a successful 

Supermarket that has a Metcash Trading Ltd Guarantee in the popular Yarra Glen Town 

Centre.



3 Location 

Yarra Glen Shopping Centre is a brand new neighbourhood Shopping Centre located in the 

popular township of Yarra Glen, approximately 50 kilometres from the Melbourne CBD in the 

renowned Yarra Valley tourist region. 


The property is located on the corner of the Melba Highway (Bell Street) and Healesville- 

Yarra Glen Road. The subject Yarra Glen Shopping Centre is the main landmark property in 

the Yarra Glen Town Centre and overlooks parkland and lakes near Pinoak Drive. 

The location and access to both Bell Street and Healesville-Yarra Glen Road ensures the 

Centre is readily identifiable and easily accessible to local residents and tourists alike. 


Yarra Glen is a scenic town located on the Yarra River, north of Lilydale and west of 

Healesville. The town itself is set amongst the rolling hills of the fertile Yarra Valley which is 

home to a large number of vineyards, bed and breakfasts, boutique accommodation and 

galleries. 

The property is situated in the Yarra Ranges Shire Area (YRSA) home to a population of 

145,000 people and covers approximately 2,500 square kilometres. The Shire stretches from 

the densely populated outer suburbs up into the surrounding foothills, agricultural valleys and 

forested areas of the Great Dividing Ranges. It is one of Victoria's largest, most varied and 

scenic municipalities. It is also the largest area of any metropolitan council. There are more 

than 55 suburbs, townships, small communities and rural areas in the Yarra Ranges. 

The Yarra Ranges has a diverse economy of around 10,000 businesses, employing more 

than 35,000 people. Manufacturing is the most valuable industry, yielding $2.8 billion in 

regional output. Other important industries include agriculture (including wine making), 

tourism, construction, property and business services and retail trade



4 Market Overview 

Overview of Current Market Conditions 


The private investment sector has proven to be the most active buyer group over the past 

twelve months with demand for premium class property investments outweighing supply. 

Investments which appeal include neighbourhood shopping centres, well located, supported 

by a strong tenancy profile and anchored by either a Ritchies Supa IGA, Coles or Woolworths 

Supermarket. The supermarket retailer offering a long term lease and ensured growth. 

Irrespective of economic conditions, food is a basic necessity and while other forms of 

expenditure may be curtailed, basic food and complimentary items are included on the 

daily/weekly shopping list. 


It is this fundamental that is the key attraction of the Ritchies Supa IGA Yarra Glen, where 

Ritchies Supa IGA is the major provider supported by complementary specialty shop traders 

within the Centre. 

In the current economic environment Ritchies Supa IGA ‘ticks all the boxes’ as it offers a well 

located property, with a quality tenant, offering ample at grade car parking and in a popular 

price range. 

Economic Overview 

Since experiencing negative growth in the December quarter of 2008, the Australian 

economy has experienced steady growth at increasing rates. The latest official GDP figures 

released as at 1 September 2010 shows GDP grew a seasonally adjusted 1.2% in the June 

quarter with the annual growth rate of 3.3%. Growth has escalated each quarter since 

December 2008. This increase in economic indicators has translated to correlated increases 

in consumer confidence and governmental monetary policy. Interest rates have been 

increased six times during 2009-2010 to 4.50%, indicating a reduced need for monetary 

stimulation of the economy in speculative terms. However, speculation of a second 

movement in rates to stabilise volatility and investor confidence continues to dominate 

reporting during the first week of each month, leading up to the RBA meeting.



Firm economic strength rooted in primary production and commodity exporting will see 

Australia fare better than the highly mechanized economies of our developed Asian trading 

partners in the short term. 


2.00% 

GDP Growth (Quarterly) 

1.50% 

Forecast 

1.00% 

0.50% 

0.00% 

-0.50% 

-1.00% 

Jun 

Sept 

Dec 

Mar-06 

Jun 

Sept 

Dec 

Mar-07 

Jun 

Sept 

Dec 

Mar-08 

Jun 

Sept 

Dec 

Mar-09 

Jun 

Sept 

Dec 

Mar-10 

Jun 

Sept 


Consumer Confidence 

Consumer confidence rose 11% from June to July 2010. The Westpac-Melbourne Institute 

records that indicator of consumer confidence and spending stand at 113.1, levels not seen 

since early 2009. Volatility amongst confidence indicators has increased dramatically over 

the past two years of the disharmony in the domestic and international market as well as a 

gauge of the general economic situation. The recent resurgence of confidence is due to 

reports of Australia’s international strength as a leader out of the international economic 

downturn as well as domestic fiscal factors such as the progressive increases in interest 

rates. Signs from the RBA and increasing economic activity will see consumer continue to 

increase, albeit at a more sustainable rate



Recent sales of Supermarkets and Neighbourhood Centres are as follows: 

Woolworths Port Melbourne, VIC 


Description: 

Sale Price: 

Sale Date: 

Equivalent 

Market Yield: 

Woolworths Supermarket 

trading as Thomas Dux 

Grocer comprising a building 

area of 954sqm 

$4,600,000 

Jun-10 

7.40% 

Woolworths Sandy Bay, TAS 


Description: 

Sale Price: 

Sale Date: 

Equivalent 

Market Yield: 

Freestanding supermarket 

recently refurbished 

comprising a building area of 

3,792qm & land area of 

7,587sqm 

$16,150,000 

Mar-10 

5.78% 

Woolworths Forster, NSW 

Description: 

Sale Price: 

Sale Date: 

Equivalent 

Market Yield: 


abutting Stockland Shopping 

Centre. Recently refurbished 

with a building area of 

3,800qm & land area of 

11,541sqm 

Excellent trading history 

$14,850,000 

Mar-10 

5.84% (Purchaser Stockland)



First Choice Liquor Port Melbourne, 

VIC 

Description: 

Sale Price: 

Sale Date: 

Equivalent 

Market Yield: 

First Choice Liquor with a 

building area of 1,171sqm 

$6,450,000 

Feb-10 

6.25% 


Coles Fitzroy, VIC 

Description: 

Sale Price: 

Sale Date: 

Equivalent 

Market Yield: 

Recently completed Coles 

Supermarket, car park & two 

office suites 

$14,700,000 

Dec-09 

6.55% 


Woolworths Caloundra, QLD 

Description: 

Sale Price: 

Sale Date: 

Equivalent 

Market Yield: 

Modern neighbourhood 

shopping centre anchored by 

Woolworths, five specialty 

tenancies and an ATM 

$18,010,000 

Dec-09 

7.50% 

Safeway, Ivanhoe 

Description: 

Sale Price: 

Sale Date: 

Equivalent 

Market Yield: 

Comprising a supermarket of 

3,552sqm plus onsite parking 

for 178 cars 

$12,150,000 

Oct-09 

7.60%




Westernport Central Shopping 

Centre, Hastings, VIC 

Description: 

Sale Price: 

Sale Date: 

Equivalent 

Market Yield: 

Single level fully enclosed 

shopping centre refurbished 

in 2003, anchored with a 

Ritchies Supa IGA 

Supermarket & seven 

specialty shops 

$6,870,000 

Sep-09 

6.85% 

Centro Rosebud, VIC 


Description: 

Sale Price: 

Sale Date: 

Equivalent 

Market Yield: 

An open mall style 

neighbourhood centre opened 

in 1979. Anchored by a 

Safeway supermarket & 15 

specialty shops. 

$13,150,000 

Jul-09 

7.52% 

Coles Geelong, VIC 

Description: 

Sale Price: 

Sale Date: 

Equivalent 

Market Yield: 


built circa 1967. Refurbished 

& extended in 2008 

$12,125,000 

Apr-09 

7.42% 

Coles Coorparoo, QLD 

Description: 

Sale Price: 

Sale Date: 

Equivalent 

Market Yield: 


constructed circa 1972 & 

refurbished in 2003 

$13,020,000 

Mar-09 

6.50%




St Helena Marketplace, VIC 

Description: 

Sale Price: 

Sale Date: 

Equivalent 

Market Yield: 

A single level, fully enclosed 

neighbourhood centre, 

comprising a strong 

performing Safeway, 13 

specialty shops and 3 ATMS 

$24,500,000 

Dec-08 

7.33% 

Artists Impression



5 Tenant Details 

Lease Details 


Lessee: 

Ritchies Supa Stores Pty Ltd 

Guarantee: 

Metcash Trading Limited 

Lease Term: 

20 years 

Further Terms: 

Two further terms of (Ten) 10 years each 

Lease Commencement: 8 th December 2008 

Base Rental: 

$594,780 per annum plus GST approx. 

Review Dates 

Average Review Dates 

Initial Lease Term: 

At the start of the 4 th , 7 th , 10 th , 13 th & 16 th lease year 


Further Lease Term(s): 

At the start of the 4 th & 7 th lease year 

N.B: Average Review is the average of the Total Base Rent & Turnover Rent in the previous 

3 years 

Market Review Date 

At the commencement of each further term: 8 th December 2028 

8 th December 2038 

Turnover/Percentage Rent 

2.5% of sales; that exceeds the Base Rent 

Outgoings Payable by the Lessee 

The Lessee is responsible for 70% of the total variable outgoings pertaining to the Centre, 

excluding LAND TAX & management costs. 

A copy of the Lease will be available upon request.



Ritchies History 


From its humble beginnings in 1870, the Ritchies group of stores has grown into an 

Australian Independent Retailing icon. The first Ritchies Supa IGA Store opened on what is 

now Nepean Highway, Frankston, subsequently expanding to the Mornington Peninsula, 

metropolitan Melbourne, Gippsland and most recently Victoria’s Western District. 

VIC Store Locations 


Aspendale Gardens Balnarring Beechworth 

Bentleigh Bentleigh East Berwick 

Camperdown Carrum Downs Churchill 

Cobden Cobram Dandenong 

Cranbourne Diamond Creek Dromana 

Emerald Frankston Hastings 

Langwarrin Mount Eliza Mount Waverley 

Narre Warren Pakenham Ringwood North 

Rosebud Rowville Sale 

Seaford Somerville Timboon 

Towerhill Wonthaggi Wantirna 

Yarra Glen 

Yarrawonga 

Ritchies Supa IGA Stores now have 14 stores in NSW and 6 stores in Queensland 

Guarantee – Metcash Trading Limited 

About Metcash 

Originating in the 1920's as a family business, Metcash Limited (Metcash) is Australia's 

leading wholesale distribution and marketing company specialising in grocery, fresh produce, 

liquor, hardware and other fast moving consumer goods. 

Metcash has 4 divisions, often referred to as business pillars, each operating in a distinct 

wholesaling industry segment:



IGA Distribution (including IGA Fresh, the specialist fresh food division); 

Australian Liquor Marketers 

Campbells Wholesale; and 

Mitre 10 


All business pillars are fully owned by Metcash with the exception of Mitre 10, which is 50.1% 

owned. 

Metcash's customers are, predominantly, independently owned grocery and liquor stores. 

With the acquisition of Mitre 10 in March 2010, Metcash has broadened its customer range to 

include independent hardware stores. 

Metcash champions the interests of the independent grocery, liquor and hardware sectors 

through its core competencies of buying, merchandising, marketing, brand building, 

distribution logistics and warehousing. 


Listed on Australian Stock Exchange in 2005. 

Original business founded by Joe David in 1927 and operated as a family business. Davids 

Limited listed on ASX in 1994. Metro Cash and Carry Limited acquired Davids Limited in 

1998. Name changed to Metcash Trading Limited in 2001. Metcash Limited became parent 

entity in 2005 following capital reorganisation.



6 Building Description 

The property commenced trading in December 2008. The property comprises a brand new 

single level enclosed neighbourhood supermarket leased to Ritchies Supa IGA. 


Building Specifications & Finishes 

Construction 

Floors: 

External Walls: 

Roof: 

Reinforced Concrete Slab 

A variety of masonry block and concrete tilt slab 

Reinforced Concrete Slab 

Internal Finishes 


Floors: 

Walls: 

Windows: 

Ceiling: 

Amenities: 

Polished Concrete Floors 

Painted plasterboard lined internal walls generally 

Aluminum framed single glazed windows throughout 

Generally, painted with plasterboard ceilings 

Ceramic tile floor and wall finishes 

Services 

Air Conditioning: The Supermarket is air conditioned through recessed ducts 

Security: Traditional security measures are in place 

Loading Areas: A loading area is provided to the side of the Ritchies Supa IGA tenancy 

Amenities: Male and female and disabled amenities are provided 

Fire Services 

- Automatic Sprinkler System with backup pumps 

- Smoke Detector



7 Sales Process 

Inspections and tender documents may be arranged by contacting the selling agents. 


Parties wishing to acquire the property are required to submit tenders by 4.00pm (EST) 

Friday 29 th October 2010. 

TENDERS ARE TO BE LODGED AT EITHER: 

GROSS WADDELL 

FITZROYS 

Level 6 Level 29 

172-192 Flinders Street 367 Collins Street 

MELBOURNE VIC 3000 MELBOURNE VIC 3000 


The Vendor and Tenderers are bound by the terms and condition of the tender as included in 

the documents prepared by the Vendor’s Lawyers and issued by Gross Waddell and 

Fitzroys. 

The tender must be accompanied by a bank cheque for 1% of the purchase price offer as 

specified in the Conditions of Tender. 

The successful Tenderer will be notified by the 10 th November 2010 or as stipulated in the 

Conditions of Tender and to pay the balance of the deposit, as required. 

Unsuccessful Tenderers will have their cheques returned to them within two weeks of 29 th 

October 2010.



8 Disclaimer 

Gross Waddell and Fitzroys (“The Agents”) for themselves and the Vendor of the property 

give notice that: 



i. The Agents advise that the financial information in this report, relating to income, 

outgoings and the like is provided without reference to the possible impact of GST, if 

any. Purchasers should make their own assessment of the impact of GST on the 

property. 

ii. The particulars are set out as a general outline only for the guidance of Purchasers 

and do not constitute an offer or contract. 

iii. All descriptions, dimensions, references to conditions and necessary permission’s 

for use and occupation and other details are given in good faith. Intending 

Purchasers should not rely on them as statement of representation of fact by must 

satisfy themselves by inspection or otherwise as to the correctness of them. A draft 

Agreement for Sale of Land is available for inspection at the offices of the agents. In 

the event of inconsistency between the Information Memorandum and the 

Agreement of Sale of Land the provisions of the Agreement of Sale of land shall 

apply. 

iv. No person in the employ of Gross Waddell or Fitzroys has any authority to make or 

give and representation or warranty whatsoever in relation to this property. 

v. The Agents, the Vendor and each of their associates and every person involved in 

the preparation of the Information Memorandum expressly disclaim any liability on 

any ground whatsoever for any direct or consequential loss or damage (whether 

foreseeable or not) which may result from any party acting on or rely upon all or any 

part of the information contained in the Information Memorandum notwithstanding 

any negligence, default or lack of care. 

vi. The Rent outgoings and other amounts payable by a tenant (tenant payments”), as 

well as the value of the property, maybe affected by GST, especially if the owner is 

unable to recover GST on tenant payments received from tenants. 

vii. This Information Memorandum does not constitute financial advice of any type or 

form. All interested parties are advised to consult their own financial and/or 

investment advisor.

APPENDIX I 

DEPRECIATION SCHEDULE

1. Indicative Property Tax Allowances Report 

This report is dated 11 October 2010 and has been prepared to highlight the potential capital 

allowances available to the purchasers of: 

IGA 

38 - 40 Bell St, Yarra Glen VIC 

As Quantity Surveyors specialising in the field of property tax allowances, Napier & Blakeley Pty 

Ltd have prepared the following tables to highlight the approximate level of allowances available 

to the purchasers of the above property. 

We have assumed that the owner will be entitled to claim available Division 40 Capital 

allowances & Division 43 Capital works deductions. 

The figures contained in these reports reflect the allowances available under the legislation in 

force as at the date of preparation of the reports. Division 40 Capital allowances are calculated 

on the diminishing value method. 

Assuming that there are no restrictive clauses in the Contract of Sale the depreciating assets 

will be able to be depreciated on the basis of a reasonable attribution of the purchase price 

(Section 40-195 ITAA 1997). Depending on the date the building commenced construction, a 

capital works deduction will be available based on the historical cost of construction having 

deducted non-qualifying expenditure, and notionally depreciating the qualifying expenditure to 

the date of settlement. 

It is worth noting that should the advised purchase price or land value change, then the value of 

the capital allowances will also change. 

For further information or clarification of this report please contact Neale Scott of this office. 

This report is intended only to give a guide to the likely level of allowances claimable. It has 

been based on a preliminary appraisal of information provided. Final schedules will be 

necessarily based on the actual sale price. 

38 - 40 Bell St Page 2 

Yarra Glen VIC 

File Ref: 3775058246 - NS 

11 October 2010

IGA, 38 - 40 Bell St 

Yarra Glen, VIC 

Indication of capital allowances deductions 

Prepared for: 

Fitzroys 

Napier & Blakeley Pty Ltd 

ACN: 006 386 278 

Level 13 

90 Collins Street 

Melbourne VIC 3000 

T 03 9915 6300 

F 03 9915 6399 

www.napierblakeley.com 

Input Data 

Year 1 Increase in Cashflow 

Purchase Price 

Land Value 

Net Rental Income 

Assumed Settlement Date 

Passing Yield 7.4% 

After Tax Return (Year 1) 

Tax Rate 

Yield With Depreciation 

Yield Without Depreciation 

45% 

5.5% 

4.1% 

30% 

6.1% 

5.2% 

$ 8,000,000 

$ 1,319,000 

$ 594,780 

01 Jul 10 

15% 

6.8% 

6.3% 

40% 

35% 

30% 

25% 

20% 

15% 

10% 

5% 

0% 

33.87% 

17.74% 

7.31% 

45% 30% 15% 

Tax Rate 

Estimated Allowances Estimated Allowances 

Year 

1 ( 365 days ) 

Division 40 

Deductions 

$ 

140,900 

Division 43 

Deductions 

$ 

105,300 

Annual 

Totals 

$ 

246,200 

300,000 

250,000 

Division 40 

Allowances 

Division 43 

Deductions 

2 

3 

146,000 

114,300 

105,300 

105,300 

251,300 

219,600 

200,000 

4 

5 

91,800 

75,500 

105,300 

105,300 

197,100 

180,800 

150,000 

6 

7 

63,300 

53,900 

105,300 

168,600 

105,300 159,200 

100,000 

8 

9 

46,400 

40,400 

105,300 

105,300 

151,700 

145,700 

50,000 

10 

11+ 

TOTAL 

35,500 105,300 

140,800 

327,800 2,948,400 3,276,200 

1,135,800 4,001,400 5,137,200 

0 

1 2 3 4 5 6 7 8 9 10 

Year 

These figures are of a general nature and should not be applied or acted upon unless supported by specific advice, they CAN NOT be used for tax purposes. Depreciation of Depreciating 

Assets is based on the DIMINISHING VALUE METHOD and the Division 43 Allowances are calculated on the PRIME COST METHOD. A claim will be dependent on a purchaser's tax 

position and the sales contract allowing the depreciation assets to be re-valued. 

SPECIFIC ADVICE IS AVAILABLE BY TELEPHONING NEALE SCOTT on 03 9915 6300 

3775058246 NS 

Sydney Melbourne Brisbane Gold Coast Sunshine Coast Adelaide 

02 9299 1899 03 9915 6300 07 3221 8255 07 5570 6432 07 5479 3566 08 8274 3760 

NOT ACCEPTABLE FOR TAX RETURNS 

Page 3

2. Disclaimer 

The information contained in this report has been based in part on material supplied by others. 

We believe that material to be correct and every effort has been made to ensure our report is a 

fair representation of the depreciation and building allowances that will be available to a 

taxpaying owner. 

Napier & Blakeley Pty Ltd do not give any warranty, nor accept any contractual, tortious or any 

other form of liability for any consequences, loss or damage which may occur as a result of a 

purchaser acting upon or using the preliminary information contained in this. 

38 - 40 Bell St Page 4 

Yarra Glen VIC 

File Ref: 3775058246 - NS 

11 October 2010

Ritchies Supa IGA Yarra Glen - Realestate.com.au

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