Bunnings Warehouse Joondalup has been acquired for $43,545,454, reflecting a record sale yield for a Bunnings Warehouse in Western Australia.
The sale was handled by Mark Wizel and Justin Dowers of CBRE Victorian Retail Investments along with CBRE’s Perth Capital Markets team of Ben Younger and Andrew Woodley-Page. This was the first Bunnings Warehouse property to be offered for sale in Western Australia for a number of years.
“While buyer confidence appeared to be more subdued at the start of the year, this result demonstrates the underlying appetite investors have for well leased retail assets. The quality of this asset, and specifically its location and lease terms, were appealing to buyers and overcame concerns about the softer economic conditions in Western Australia,” CBRE Senior Director, Mark Wizel, said.
Bunnings Warehouse Joondalup benefits from its location in one of Australia’s fastest growing municipalities, with the current population of 164,000 forecast to grow to 180,000 by 2036.
“The depth of the buyer interest came as no surprise in light of previous Bunnings Warehouse sales, which have generated consistently strong investor demand. This is a strong result that shows confidence in the property market and in Bunnings assets,” Mr Dowers said.
“We were delighted to receive 14 offers to purchase, with a number of strong offers from interested parties.”
Bunnings will enter into a new 12 year lease paying an initial annual rental of $2,395,000. This translates to a sale yield of 5.5 per cent.
The Joondalup property has a lettable area of 17,006sqm and is situated on a 2.65ha site, with 416 car spaces on title.
The buyer’s representative - David Ryan from DBR Property Services - said; “Our client is delighted to have successfully purchased Bunnings Warehouse Joondalup. We were attracted by the quality of the Bunnings tenancy covenant, the strength of their operating model and the structure of the lease. We continue to pursue opportunities nationally to acquire similar assets in the future.”
Mr Wizel said investors were increasingly focused on income security and were increasing their exposure to well leased property assets and commodities such as gold as a result of the recent uncertainty in the equities markets.
“This has been highlighted by the continued cap rate compression for Bunnings Warehouse properties and the yields that investors are willing to pay for new, long leased assets,” Mr Wizel said.
Bunnings General Manager, Property, Andrew Marks, said the sale was in line with the Group’s long term strategic approach to the management of its capital and property program.
He also noted that interest in the purchase from a new pool of investors from both the east and west coasts showed the depth of the buyer market for Bunnings’ assets.
