Charter Hall has picked up its 66th Bunnings, at South Nowra.
The year old outlet on 2.935 hectares at 145-159 Princes Highway is setting the fund manager back $65.3 million reflecting a four per cent net passing yield.
Nowra Property Group, backed by Derek Lowe, Peter Henderson and Stephen Kay, was the vendor.
The seller and Bunnings applied to develop the 17,982 square metre warehouse in 2018; the complex replaced a c6248 sqm facility.
The outlet is surrounded by 428 car parks.
Mr Lowe is an active Bunnings investor – last September he led a syndicate which paid $28.55m – a 4.19pc return – for the South Kempsey store which is under construction.
That property, 320 Macleay Valley Highway, was offered with a 10 year leaseback.
Charter Hall will hold the property, known as Bunnings Nowra, in the Direct Industrial Fund No 4.
Bunnings has 11 years left to run on the lease; its agreement will see the rent rise 2.5pc per annum (story continues below).
“DIF4’s acquisition of Bunnings Nowra adds to the fund’s growing portfolio of high quality properties with strong tenant covenants,” Charter Hall Direct chief executive officer, Steven Bennett, said.
“Bunnings is arguably one of Australia’s most trusted businesses,” he added.
“The acquisition raises the number of Bunnings properties across Charter Hall’s portfolio to a total of 66, representing a gross annual value of almost $3.7 billion,” according to the executive.
Charter Hall Direct fund manager Julian Menegazzo said the asset met the trust’s requirements, being in a premium location with the potential for high capital growth, and with a long lease covenant.
In this instance the buyer will benefit from depreciation/taxation benefits too.
JLL’s Sam Hatcher represented Nowra Property Group.
Nowra is about 155 kilometres south of Sydney.
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