Charter Hall is spending $48.8 million – about 10 per cent over guide – for a Bunnings investment in an Adelaide growth corridor.
The deal with Cromwell Funds Management for the Munno Para West store reflects a 4.25 per cent net passing yield.
The vendor valued the then-unbuilt property at $27.5m when acquiring it from GIC in late 2015.
The asset will switch between trusts – the Cromwell Direct Property Fund to Charter Hall Industrial Fund No 4.
Last month, Charter Hall – which holds more than 60 Bunnings outlets – paid $49m for the Baldivis store, 45 kilometres south of Perth.
Last November the manager outlaid $353m on six more investments leased to the hardware chain, in New South Wales, Queensland and in South Australia at Windsor Gardens – also north of Adelaide but much closer to the CBD.
On Monday we reported Cromwell was paying Molonglo close to $80m for an eight-storey Canberra office.
Bunnings Munno Para West
On the north east corner of Curtis and Frisby roads, the 4.11 hectare Munno Para West site contains a 16,936 sqm showroom and over 400 car parks.
Bunnings has seven years left on its lease but with six options can stay until 2064 (story continues below).
Its rent will rise three per cent a year for the balance of the initial term.
Munno Para West – about 40km north of Adelaide – falls within the Playford council area – considered South Australia’s fastest growing in regard to population.
The property is also about 13km south of Gawler – a gateway to the Barossa region.
“This acquisition is in line with our strategy for the DIF4 fund and builds on our momentum in the industrial and logistics sector,” Charter Hall Direct chief executive officer, Steven Bennett, said.
“DIF4 has completed $230m in acquisitions over the past three months and $1 billion over the past 12 months, demonstrating the ability for the fund to deploy capital in a highly sought-after asset class that provides accretive results,” according to the executive.
Colleague Jack Walters, head of Industrial Transactions, added the group has been acquiring investments leased to tenant customers in the essential services and non-discretionary asset classes “which have continually demonstrated to be a resilient and defensive investment and served all of our funds very well”.
In June, DeLuca Corporation banked $22.2m from a newly completed Bunnings in Plainland, about 60km west of Brisbane.
That deal reflected a 4.21pc yield – the second lowest ever sealed for a property tenanted to the hardware chain.
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