A new Bunnings store under construction in Queensland’s Hervey Bay has sold for $58.6 million, setting a new national yield record of 4% for the hardware retail chain.
Bunnings Group sold the 17,421 sqm property, which is due for completion in late 2022, to offshore private investor Cook Property.
The Bunnings Hervey Bay property was sold with a 10-year net lease to Bunnings Group, with options extending until 2080.
The asset attracted more than 200 buyer enquiries from investors across Australia and overseas, according to Savills.
Bunnings General Manager of Business Development and Property Finance Garry James said the quality of their sites and the strength of the Bunnings covenant continued to drive investor demand.
“The Bunnings Warehouse is ideally situated to support the growing area of Hervey Bay and we are pleased to have completed a successful sale at a yield that is reflective of the market on lease terms that take into account our operational objectives,” Mr James said.
The deal was jointly negotiated by Savills’ Peter Tyson and Stonebridge’s Phil Gartland and Justin Dowers.
Savills National Director Peter Tyson said investors were targeting long-leased secure returns underpinned by high quality tenants.
“Bunnings is quite clearly one of the most highly sought-after lease covenants in today’s marketplace,” Mr Tyson said.
Stonebridge Partner Phil Gartland said the Bunnings covenant and asset genre continued to come to the fore for savvy investors, being one of the most sought after commercial real estate investments.
“This was certainly reflected in the depth of bidding across private investors, syndicates and institutional capital alike,” he said.
Shopping spree for Australian retail properties continues
There has been a flurry of retail deals throughout Queensland and the rest of the country in recent times.
Last week, Greenpool Capital and Qualitas took over the Gold Coast’s Runaway Bay Centre after buying the remaining 50% interest from Vicinity Centres for $132 million.
Last month, Vicinity Centres bought a 50% stake in the Gold Coast’s Harbour Town outlet centre from a Lendlease-managed fund for $358 million.
UniSuper and Cbus Property also teamed up with AMP Capital to take majority ownership of the Gold Coast’s Pacific Fair and a 50% stake in Macquarie Centre in NSW in a retail deal worth $2.2 billion, as part of a recapitalisation of the AMP Capital Retail Trust.
Outside of Queensland, recent retail deals include Link REIT’s $538.2 million acquisition of a 50% stake in three retail properties in Sydney.
In addition, CIP Asset Management sold a 50% stake in the Roselands shopping centre in Sydney to JY Group for $167 million, while Primewest bought the Northgate Geraldton shopping centre in Geraldton, WA from a Lendlease fund for $71.2 million.