Record-setting Bunnings smashes price expectations
A Tasmanian Bunnings Warehouse that is the most-viewed commercial property of the year has set a record result at auction.
The Bunnings site at Glenorchy, which attracted more views on Realcommercial.com.au than any other property in 2018, sold for $14.06 million at Burgess Rawson’s final Investment Portfolio Auction of the year on Wednesday, obliterating early price expectations of around $8 million.
The price reflected a yield of just 3.13%, understood to be a record for a Bunnings-leased property.
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Almost $60 million worth of commercial property sold at the portfolio auction, with 10 of 19 properties trading on the day.
But it was the Bunnings that many investors came to see, with the property – sold by the Royal Agricultural Society of Tasmania – garnering a flurry of bids from investors as they chased its rare 25-year ‘triple net’ ground lease until 2040, plus a 25-year option and fixed 3% increases.
The Bunnings at Glenorchy in Tasmania.
It drew more than 30,000 views online throughout its marketing campaign.
Burgess Rawson director Shaun Venables says the final price exceeded all expectations.
“To set a new yield record for a Bunnings store in Australia at 3.13% in Glenorchy’s Tasmania with a sale price of $14.060 million was outstanding,” he says.
“The 2018 year has finished on a solid note for commercial property despite continued negative press about the property market generally.”
“In the commercial property sector, it is business as usual. The market is still buoyant and we expect to see similar results in 2019 with very little changing. Quality commercial property assets will continue to ride through all market conditions unscathed.”
The Coles supermarket at Hamilton in Victoria.
Other commercial properties also sold well at the auction, with a Coles-leased supermarket at Hamilton in Victoria achieving the day’s highest price – $23 million on a 5.2% yield.
A 7-Eleven outlet at Ascot in Western Australia slipped under a 6% yield when it sold for $7.2 million, a property leased to NAB at Ballarat in Victoria sold for $6.25 million on a 5.32% yield, while Petstock outlet at Cranbourne fetched $2.6 million on a yield of 5.4%.
