Charter Hall fund boosts Bunnings portfolio
Charter Hall has bought four Bunnings outlets for the Retail REIT (CQR) – outlaying a total $151 million.
Two were purchased in September with a leaseback – at Airlie Beach and Goulburn – part of a $290m portfolio with four other outlets.
The others are coming from other Charter Hall funds.
The largest, spreading 4.1 hectares in Toowoomba, cost it $41.4m in 2018.
The fourth new CQR outlet, on 3.3ha at Cairns, set the manager back $17m in 2014.
Coincidentally Bunnings sold those properties with leasebacks too.
Below market rents: Charter Hall
Announcing the deal as part of its quarterly reporting, a Charter Hall statement said rents for the four new assets are on average 15-20 per cent below market.
Lease terms range up to 10 years with fixed annual rent reviews between 2.5-3pc while the warehouses occupy large blocks in well established and growing regional centres, it added.
“These acquisitions extend CQR’s net lease position into the hardware sector which complements CQR’s convenience retail strategy,” according to Charter Hall Retail chief executive officer, Ben Ellis.
“This recent move towards investing in net lease hardware assets on stand-alone sites highlights our ambition to continue to grow CQR’s net lease convenience retail portfolio,” he said.
“Bunnings is a strong Australian brand, and the national hardware industry is set for growth as Australia’s population and urban footprint continues to grow,” he added.
The deal comes three months since Charter Hall sold a Melbourne Bunnings, in Clyde North, to the Schiavello family for $44m.
In April meanwhile the asset manager, on behalf of the Direct BW Trust, banked $28m from a Bunnings backed warehouse at Taree.
That buyer was Newcastle City Council.
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