Bunnings Young trades at sub-5pc yield

The price for Bunnings Young reflects a 4.95 per cent yield.

A near new Bunnings outlet at Young – a 375 kilometres drive south west of Sydney – has sold for $11 million.

The price reflects a 4.95 per cent yield – a benchmark for a non-metro NSW investment rented to the group, according to Colliers’ James Wilson, who marketed it with Alex James-Elliott.

On 1.15 hectares at 288 Boorowa Street, the 5530 sqm complex was completed late last year.

Offered with a 10 year lease, it is the only Bunnings within 70 kilometres.

“The transaction further highlights market strength for high calibre assets, with offers received from local investors, in addition to offers from investors based in…ACT, Melbourne and Adelaide,” Mr Wilson said.

In the end, a Sydney investor won it.

“The 4.95pc passing yield…is the first sub 5pc yield announced publicly in non-metro NSW for a Bunnings warehouse investment” (story continues below).

In 2018, a new store occupied by the group at Katoomba – 100km west of Sydney – traded for $9.1m reflecting a 5.27pc yield.

Last November, Charter Hall managed Long WALE Hardware Partnership paid $353m for six east coast, metropolitan outlets including two in the NSW capital – at Bonnyrig and Carinbah.

A month later, Home Consortium spent $56m on a Seven Hills complex.

Earlier this year Newmark Capital acquired two Bunnings-backed investments for a new trust – at Eastgardens, south of Sydney (for $75m) and Preston, in Melbourne’s north ($85m).

Young is considered Australia’s cherry picking capital.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.