Offshore investors trade regional Bunnings

Bunnings recently sold a 1.38ha site abutting its Mill Park store for c$7m.

An offshore investor has paid $9.8 million for Bunnings Horsham.

The property passed in on a $9.1m vendor bid when it was auctioned by a different marketing agency in December, 2019.

The highest genuine offer was $8.95m.

At the time, the annual income was $560,766.

Assuming it is three per cent higher now – c$577,700 – the latest sale price reflects a 5.9pc return.

JLL’s Stuart Taylor, Tom Noonan and MingXuan Li brokered the latest deal, off-market, for a consortium of New Zealand investors.

The sale comes a month since Bunnings offloaded a surplus 1.38 hectare site beside its Mill Park store, in Melbourne’s north, for a speculated $7m.

Bunnings Horsham

On 9581 square metres at 24-38 Wilson Street, on the north west corner of Urquhart, the Horsham property contains 7465 sqm of area.

Until eight years ago, the bulk of the asset was occupied by a Dahlsens (story continues below).

Bunnings is on a lease expiring in 2025 with four five year options.

“Large format retail and neighbourhood centre yields are now at a new cyclical low, highlighting the sentiment towards these sub sectors driven by their defensive nature of the tenant profiles,” Mr Taylor said.

“The resilient performance of fundamentals through the COVID-19 crisis in terms of Moving Annual Turnover and rent collections, continues to attract new sources of capital to convenience retail assets,” he added.

“This combined with the record low interest rates is creating the most competitive bidding environment we have ever seen in over a decade”.

Mr Noonan said Bunnings backed investments are amongst the most sought-after retail investment sought by private, wholesale and institutional investors.

In May, a warehouse with a 10 year lease to the hardware chain in the New South Wales rural town of Young collected $11m – a price reflecting a 4.95pc return – from a Sydney investor.

Three weeks ago, De Luca Corporation sold a newly opened warehouse of this type at Plainland, c60km west of Brisbane, to a Melbourne buyer for $22.2m – a 4.21pc yield.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of