Council buys Bunnings from Charter Hall
Newcastle City Council has bought a major Bunnings backed warehouse as an investment.
The 9437 square metre outlet on 3.8 hectares at Taree, on the Mid Coast, is costing $28.15 million – a circa five per cent return.
Charter Hall was the vendor on behalf of the Direct BW Trust which outlaid $14.2m in March, 2014.
Bunnings’ lease expires in November, 2034, though with (six) options it can stay until 2083.
Council digs deep
Council will tip Taree revenue into other projects including building infrastructure; Newcastle, about 120 kilometres north east of Sydney, is expected to record 0.8 per cent population growth per year between 2021-2046 – or 35,998 – bringing the municipality to about 205,445, according to the Australian Bureau of Statistics.
Taree is about 130km north of Newcastle; its population is forecast to rise from 18,374 to c22,200 over the same period.
Charter Hall Direct chief executive officer, Steve Bennett, said the price represents a very competitive yield.
“Our strategy of working collaboratively with the tenant and the on-market sale process has maximized the sale price for unitholders,” according to the executive.
“For investors in the BW Trust, who came in on the…initial capital raise, they will have received a very strong equity internal rate of return of 13.9 per cent per annum over 10 years from core Australian real estate,” he added.
JLL brokered the sale scheduled to settle at the end of this month.
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