HARD BARGAIN
A Colac warehouse sells to Melbourne investors
“The price point created a far higher level of accessibility for a wide range of investors.” - Mark Wizel, CBRE
A MELBOURNE family has paid $7.5 million to buy Colac’s Bunnings Warehouse from a trio of local investors.
The prime 6500sq m property at 130-138 Bromfield St, Colac, sold following a two-month expressions of interest campaign by CBRE’s Victorian Retail Investments team of Mark Wizel, Joseph Du Rieu, Justin Dowers and Kevin Tong.
The key to the purchase was a secure eightyear lease to Bunnings, which opened for business in the western Victorian city in 2015.
The sale price reflected 6.09 per cent yield, which is considered high for a Bunnings Warehouse, with many stores transacting on yields below 5 per cent.
A Bunnings at Yarrawonga previously sold for almost $12 million on a 4.94 per cent yield, while another at Osborne Park in Western Australia traded for just over $7 million on a 4.65 per cent yield.
CBRE national director of retail investments Mark Wizel said the campaign attracted interest from 115 parties and elicited four formal offers from local and offshore bidders.
Mr Wizel, who has managed the sale of 14 Bunnings assets in Victoria in the past six years, said the sub-$10 million price tag was a drawcard for the property, because it had such an attractive lease.
“While the price point created a far higher level of accessibility for a wide range of investors, the smaller format store did present a hurdle for many investors as we have seen Bunnings continue to move toward large format sites in recent times,” Mr Wizel said.
But buyers agent David Ryan, of DBR Property, who acted on behalf of the buyer, said the property was a good fit.
“This asset, much like several similar we have been involved with over the past 24 months, fits very comfortably within the portfolio of our private clients,” Mr Ryan said.
The high-yielding result would open more eyes of more Melbourne investors to regional Victoria, CBRE’s Mr Du Rieu said.
“With investors continuing to be starved of higher yielding opportunities in Melbourne or other more volatile asset classes, we anticipate the buyer market to continue to actively seek strong freestanding retail investment properties with blue chip lease covenants such as Bunnings,” he said.
The Colac Bunnings site nets $475,090 a year in rent and it will be sold with fixed annual rental increases of 2.75 per cent, with options up to 2035.