Good Guys, a great buy

ANCHORED by market-leading tenants, this substantial Moonah building has attracted plenty of attention since hitting the market. For many years, No.141 Main Rd has been leased to white goods and electronics retailer The Good Guys — a subsidiary of ASX-Listed JB HiFi Limited — and locally-owned floor covering experts Giffards Floorworld.

Knight Frank commercial sales agents, George Burbury and Claude Alcorso, took the property to market last week and within three days had fielded over 20 inquiries.

Mr Burbury said the inquiry had been diverse and had come from all over Australia.

“We have had calls from other national bulky goods tenants, syndicator investors, and some local high net worth Tasmanians as well,” he said.

The building is well positioned in Moonah’s commercial precinct with direct frontage to the thoroughfare spanning 38m. The road is the dominant north-south link between Hobart’s CBD and Moonah.

Alongside The Good Guys, Moonah is home to some of Australia’s most recognisable retail brands including Woolworths, Harvey Norman, McDonalds, Beacon Lighting, Australia Post, Chemist Warehouse, BCF, the Commonwealth Bank, RSEA, Mitre 10 and Jayco.

Situated at the front of the

2365sq m property is a large and modern showroom and to the rear there is an original warehouse, which includes staff amenities — both are leased to The Good Guys.

Adjoining this building to the north, is a modern warehouse facility leased to Giffards Floorworld.

The offering is 100 per cent leased, generating an estimated net income of $596,459 plus GST per annum.

The building also benefits from car parking alongside and to the rear.

The Good Guys has just under three years on its current lease plus a six-year option.

Opportunities such as this are rare to market, and while a Launceston Good Guys property was sold at auction in April, they do not provide a perfect apples-to-apples comparison.

Mr Burbury said the Launceston property was a brand new build, which comes with significant depreciation benefits on the asset.

“In Moonah, our asset was partly constructed in 2012, plus the older portion of the building at the rear — quite different compared to the northern asset,” he said.

“However, rents are traditionally higher in Hobart than Launceston.

“There are a number of factors that set them apart from one another.

“Moonah will be sold by expressions of interest.

“The early interest is indicating pricing feedback of about $10.8mplus, representing a net yield of 5.5 per cent or potentially lower.”

With Southern Tasmania’s record low vacancy rate in the bulky goods sector, and no new bulky goods developments under construction in the surrounding precinct, this opportunity has caught the attention of investors.

There is always plenty of interest in Tasmanian commercial assets, and Mr Burbury said one of the key reasons was the value of these existing buildings compared to the high construction costs and tight land availability should an investor seek to build something similar.

“People would certainly be having discussions and weighing their options between building or buying established,” he said.

Expressions of interest for No.141 Main Rd will close on October 20.