Four Bunnings Sites Sold to CBRE Global Investors for $180 Million

A portfolio of four newly-built Bunnings hardware stores have been sold to CBRE Global Investors in a transaction worth $180 million with yields struck in the five per cent range.

CBRE Global Investors has acquired the portfolio of four Bunnings Warehouse retail properties in Australia and New Zealand totalling over 54,000 square meters of lettable area on behalf of clients of CBRE Global Investment Partners.

The Wesfarmers-owned stores are located in Adelaide (Windsor Gardens), Sydney (Caringbah and Bonnyrigg) and Auckland (New Lynn). The Windsor Gardens and Caringbah sites are still under construction. All four properties will be leased back to Bunnings with 12-year leases.

CBRE Global Investors said that all four freehold assets are located in metropolitan areas on arterial roads. Factors expected to drive growth in these markets include household disposable income, renovation activity, housing churn, value and formation, weather, lifestyle and demographic trends, government activity and technology.

“This portfolio provides exposure to a strong credit tenant who is a leading retailer in the home improvement market with quality assets and attractive lease terms,”CBRE Global Investors director Chris Johnston said.

“Additionally this segment of the retail sector is a preferred one, and this transaction is part of a focused programmatic strategy on behalf of our Global Separate Accounts business. We welcome the opportunity to work with Bunnings on any future acquisitions.”

The agent on the transaction was JLL acting for Bunnings.

JLL’s Stuart Crow said the sales would introduce a new major landlord for Bunnings’ warehouse portfolio, with both parties willing to grow the portfolio over time.

The transaction continues a strong run on these assets in Australia and New Zealand.

In October Charter Hall’s Long Wale Hardware Partnership spent $187 million acquiring a portfolio of six former Masters hardware retail stores subject to new 12 year leases to Bunnings.

Charter Hall also bought a Bunnings warehouse in Burnie Tasmania as it adds assets to a forthcoming new consumer staples fun.

Whilst transactions appear to be settling in the 5 per cent yield range for this type of asset, elsewhere an Officeworks store at North Lakes in Brisbane’s north sold in October on a record low 4.8 per cent yield for an Officeworks store, highlighting the competition for these offerings.

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