A Bunnings investment at Swan Hill, near the New South Wales border, has sold for just over $18 million reflecting a 3.99 per cent net passing yield.
Covering a 1.67 hectare Commercial 1 zoned site at 74 Nyah Road, with a 6666 square metre warehouse attached to a nursery and 140 bay car park, the asset was offloaded by retired Adelaide doctor Prabhash Goel, who via an entity, Hawkers Property Group, paid the hardware group $10.95m for the then new asset in August, 2015.
The property is subject to a lease expiring in seven years, with fixed annual 2.5pc rent rises.
With options, the tenant can stay until 2059.
Savills’ Rick Silberman, who marketed the store with Benson Zhou, said it is the dominant franchise within a catchment containing c38,000 people, with an annual economic output of c$3 billion.
The nearest Bunnings is at Echuca, 155 kilometres away.
The tightest return for an asset leased to the retailer – 3.12pc – was struck in 2018 when the Royal Agricultural Society of Tasmania sold Bunnings Glenorchy for $14.02m.
Late last year, Bunnings offloaded a Pialba, Hervey Bay, outlet, on a funds through basis to New Zealand’s Cook Property Group for $58.6m, like Swan Hill, reflecting a 3.99pc yield (story continues below).
Another circa-four per cent yield
The Swan Hill property is selling to a Melbourne and Gold Coast based private investor who also holds a Hotham strata asset, Geelong mall and petrol stations.
The deal comes two months since Charter Hall paid $65.3m, reflecting a four pc yield for Bunnings South Nowra, on 2.9ha (this group also recently acquired assets backed to the retailer, at Baldivis, south in Perth and Adelaide’s Munno Para West).
Last week, we reported Bowens outlaid $12.32m for a 4.9ha block in Melbourne’s west Cobblebank, with plans for a major store and distribution centre.
Swan Hill is about a 340 kilometre drive north west of the CBD.
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