An investor has acquired the Bunnings warehouse and Amart Furniture store in Hoppers Crossing for $99.6 million.
A range of buyers inquired and bid in response to the expressions of interest campaign, including private, domestic, institutional and international buyers, said Billy Holderhead, selling agent and a Burgess Rawson partner.
An investor, ESCB Holdings, purchased the large format retail property, which is around double the size of most Bunnings stores sold since May 2019.
With Bunnings being the anchor tenant of the property, the hardware brand generates 73.8% of the net income.
There is a five-year lease option plus 3% annual rent increases for the Hoppers Crossing Bunnings, which opened in 2013, and the lease for Wesfarmers-owned stores extends until September 2028, also CPI increases are included in the lease agreement that Amart renewed for a ten-year term.
“The strength of the Bunnings business and size of the store attracted considerable market interest,” Mr Holderhead said.
Investors are attracted to the relative stability commercial property offers compared to other investments such as shares.
Burgess Rawson partner Beau Coulter said,“Instead of investing in Wesfarmers, Woolworths or Coles shares and sweating on the daily market fluctuations, property investors are parking money in bricks and mortar with secure, long-term leases to these same groups,”
“Relatively speaking, it’s boring, but that’s the appeal.”
Bunnings’ location in such a fast-growth area creates a larger market for home improvement projects in the area.
The large format retail site was offered with a subdivision plan, but the investor opted not to proceed with that aspect of the deal.
The large landmark site on Old Geelong Road was clearly worth far more in the long term than the land tax advantages attached to the proposed subdivision.
Previously, Charter Hall bought a 17,982sqm Bunnings store in Nowra on the NSW south coast for $65.3 million, the largest Bunnings sale of the year.
Compared to 23 Bunnings sold in 2021 when the home renovation activity that accelerated during lockdowns was at its peak, Hoppers Crossing is the eighth Bunnings to be sold in 2022.