Private investor buys on tight yield

 A Bunnings Warehouse in the northern Perth suburb of Joondalup has been sold on a lease-back basis to a private investor on a yield of 5.5 per cent.

The Joondalup property, which was sold for $43,545,454, has a lettable area of 17,006 sqm on a site of 2.65ha with parking for 416 cars. Bunnings will enter into a new 12-year lease on the property at an initial annual rental of $2.395 million.

The sale was negotiated by Mark Wizel and Justin Dowers of CBRE Victoria Retail Investments with CBRE’s Perth Capital Markets team of Ben Younger and Andrew Woodley-Page.

Joondalup is in one of Australia’s fastest growing municipalities with the current population of 164,000 forecast to grow to 180,000 by 2036.

More than a dozen offers were received for the property, which was the first Bunnings Warehouse to be offered in WA for some years. According to Wizel, investors are increasingly focused on income security and are 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,” Wizel says.