EG outlays $48.75m for Rockdale Bunnings with redevelopment options

A fortnight ago Charter Hall spent $70m on nearby Bunnings Alexandria also with plans to repurpose the land once the occupier’s lease expires.

EG is spending $48.75 million on Rockdale’s Bunnings with plans for an industrial redevelopment if the occupier quits upon its 2023 lease expiry.

The property will be held by EG Australian Core Enhanced Fund (ACE) which launched last June targeting income producing assets with potential “to be value-added through active asset management”.

In August, the EG managed Australian Core Enhanced Fund paid Bob Ell’s Leda Holdings $38.2m for a multi-building Ingleburn industrial investment.

Its new holding at 383-387 West Botany Road is about a four kilometre drive south of Sydney Airport.

It is twice this distance in the same direction from Bunnings Alexandria – which Charter Hall’s managed Core Logistics Partnership acquired a fortnight ago for $70m also with the intention of repurposing the land into an industrial investment once the lease expires.

Four of a kind for EG, which quietly ups ACE’s target end-value to $1bn

EG ACE launched with a $500m commitment and targeting a portfolio which would be worth $800m.

Instead it said this week, there’s $800m up its sleeve on top of the $202m it has outlaid.

Including 383-387 West Botany Rd – acquired on a 5.4 per cent passing yield – the trust holds four properties.

Its first wasn’t far from its latest: 230 Captain Cook Drive, Kurnell, cost $36m and includes a two storey office and 15,955 sqm warehouse acquired with a two year leaseback to Dicker Data (story continues below).

Four months ago EG ACE paid Bob Ell’s Leda Holdings $38.2m for a multi-tenanted, multi-building industrial investment on 4.1 hectares at Ingleburn, 50 kms west of Sydney.

Late last year it picked up its most valuable asset: a 12-storey office at 2 Mill St in the Perth CBD, for $79.05m.

Busy time for Bunnings deals

Also this week, HomeCo for its newly floated Daily Needs REIT paid a Canberra Raiders trust $56m for Bunnings Seven Hills – 30 kms north west of Sydney – a deal which reflected a 5.1pc yield.

Last month, Charter Hall managed Long WALE Hardware Partnership spent $353m on six Australian investments leased to the occupier (with plans to outlay c$50m on another, in Auckland).

The Wesfarmers backed retailer has been active in Melbourne planning and leasing circles too, recently – behind a proposal for multi-level store in inner north Brunswick and pre-committing to a landmark 16,500 sqm outlet in Tarneit.

In October Bunnings announced it would consolidate from several suburban offices in that city to a new headquarters, recently completed by Growthpoint at 570 Swan St, in the Richmond pocket of Burnley.

Bunnings Rockdale, which EG will replace with an industrial investment if the tenant doesn’t renew in 2023.

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Marc Pallisco

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

Marc Pallisco