Popular Otto’s market sees 24 per cent price jump in three years

3-11 Illuka Street, Currajong, has sold for $8.7m.

Covid-19 has failed to dent popular Qld shopping and leisure market, Otto’s, whose site complete with skating rink, has jumped 24 per cent in just three years.

An interstate buyer snapped up the massive 5,340sq m home of Townsville’s award-winning Otto’s Market Warrina before it could go to auction, signing off on an $8.7m price, $1.7m more than the property had sold for in 2019 months before Covid-19 broke out.

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The site has triple street access.

Townsville’s only ice skating rink is one of the tenants under the Otto’s head lease.

The new owner from New South Wales is expected to clear $615,501 (plus GST) a year in fully leased net income, a yield of 7.07 per cent, with the shopping arcade and ice rink complex to continue to run under a single 12-year head lease to Otto’s Market – with options to 2036.

Ray White Commercial QLD agents Lachlan O’Keeffe and Michael Feltoe marketed the property located less than 5km from the Townsville CBD.

Mr O’Keeffe described the deal as “a revolutionary model” for independent supermarket operators.

The popular food court.

The rink is a fun part of Townsville’s offerings.

“This was a fantastic opportunity to acquire a truly passive investment, underpinned by what I think is a revolutionary model that will shape the way independent supermarkets are offered in the future,” he said. “It does not surprise me in the slightest that it was snapped up prior to auction”.

The complex has a diverse mix of 17 specialty stores operating under Otto’s head lease, the agents said, with 103 on-site car parks and triple street access.

Mr Feltoe said the site had “led to a fantastic yield in the Townsville market”, auguring well for their future sale of The Precinct Townsville which is also anchored by Otto’s Market.

Several locally owned and operated stores are part of the complex.

Otto’s will remain on site, with options out to 2036.

Otto’s Market Warrina was set up in 1966 – the first of its kind outside Brisbane – and today houses Otto’s flagship store, as well as other locally owned and operated specialty stores including a bespoke florist, hairdresser, travel agent and more, as well as Townsville’s only skating rink.

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