A consortium with experience developing properties anchored by fuel and fast food tenants has sold Mernda Convenience Centre for $13.1 million.
James Hunt, Brett Tooley and Jim Lamb only completed construction of the facility this year.
The asset includes 1409 Plenty Road, Mernda, a 3404 sqm block with a service station tenanted to Caltex for 15 years, Subway for seven and returning annual net rent of $467,800.
It adjoins a Hungry Jacks restaurant, on a 2323 sqm site, 1407 Plenty Road, at the north west corner of Lombardy Drive and with a crossover at Veneto Way.
The fast food retailer also picks up the outgoings on its lease, which expires in 12 years.
Both land holdings are zoned Development Zone Schedule 1.
Site near corner Australia’s two biggest supermarkets warred in 2014
Mernda Convenience Centre is opposite a new McDonalds which is next door to a recently completed Bunnings outlet.
It is also near the Bridge Inn Road intersection – where six years ago Coles was taking legal action against Woolworths trying to block it from constructing a supermarket at the north west corner (which it did get built, last year).
Woolworths controlled a 26.4 hectare site at the south east corner – also opposite Mernda Convenience Centre – for which it paid about $28 million in 2010.
The supermarket giant never developed its parcel, instead, last January, selling it for $51.5 million to Land Capital permit-ready to become Mernda Town Centre, a mixed-use village with a retail component, part of which it will occupy.
About 27 kilometres north east of Melbourne’s CBD, farmland in Mernda has been making way for housing estates increasingly since about 2000.
Its retail catchment includes neighbouring and fast-growing suburbs like Doreen and Wollert.
In 2018, Mernda train station opened – extending the South Morang line by eight kilometres.
Deal sealed at 4.8 per cent yield after 14 offers were received
The deal, they said, reflects a 4.8 per cent yield.
The incoming owner will be able to claim substantial depreciation benefits over coming years.
Factoring in the Hungry Jacks lease, and measured by income, the asset’s WALE (weighted average lease expiry) is a long 13.1 years.
Fourteen offers came in for the asset which was marketed via an expressions of interest campaign closing on March 12.
That was above the vendor’s expectation, Mr Taylor said, “demonstrating the level of demand for commercial property assets which are considered defensive in the current environment”.
Mr Noonan added that assets with long-term leases to essential service or non-discretionary businesses are being sought at the moment.
In the sub-$20 million price point – where private investors, syndicates and trusts compete – “investors continue to look to direct property as a safe-haven”, Mr Taylor said.