Savvy investors are expected to compete strongly to acquire a dominant Bunnings Warehouse site in South Australia’s largest and fastest growing local council area.
Colliers’ James Wilson, Chris Maher and Alistair Mackie have been appointed to sell the modern Bunnings Warehouse premises at the prominent corner of Frisby Road and Curtis Road in Munno Para West on behalf of unitholders in the Cromwell Direct Property Fund, which is managed by Cromwell Funds Management.
“This is a prime opportunity to acquire a dominant Bunnings Warehouse secured by a long term and attractive net lease structure, on a strategic and substantial land holding within Adelaide’s booming urban growth corridor,” Mr Wilson said.
“17 freestanding Bunnings Warehouse assets have transacted in the past 18 months across Australia for over $900million, representing an average price of $47.41million per deal, with the Colliers Bunnings Warehouse Eastgardens transaction, acquired by Newmark Capital for $75million, setting the benchmark investment yield nationally at 4.15%.”
The 16,936 (approx.) facility is situated on a 4.11ha site and is fully leased to Bunnings Warehouse on a 12-year lease, with a seven-year WALE and 6 x 6 year options to 2064. With rare fixed 3% annual rent increases, the property returns a net operating income of $2,075million per annum as at August 2021.
“The strong transactions recorded for freestanding Bunnings Warehouse assets and proven resilience through COVID-19 is driving continued investor demand, as buyers seek to deploy pent-up capital and take advantage of the low interest rate environment,” Mr Maher said.
“The flight-to-quality retail assets, such as single tenanted investments with strong covenants, has been an ever-present trend and proven strategy for wealth creation and preservation. Since March 2020, with COVID-19 majorly impacting the retail markets, the demand for core, defensive assets has only intensified.
“The main investment fundamentals of a single-tenanted investment have proven to be extremely resilient and attractive throughout the tough market conditions. Established and emerging capital is targeting the security of non-discretionary income, underlying land value and strong growth locations.”
Bunnings Munno Para West is located around 38km north of the Adelaide CBD and about 13km south of Gawler, the gateway to the Barossa wine region.
“This substantial land holding is strategically located within the booming northern growth corridor of Adelaide, forecast to benefit from significant population growth and infrastructure spending,” Mr Mackie said. “Bunnings Munno Para West is truly a future-proofed investment sitting within the heart of Playford, Adelaide’s fastest and largest growing Local Council Area.
“By virtue of land locking with coastline to the west, foothills to the east and metropolitan Adelaide to the south, the Playford growth corridor is optimally placed to service the state’s population growth.
“The Northern Expressway connects with the State Government’s recently completed $850million Northern Connector, creating a major arterial link road between Adelaide’s regional north and the CBD. This will significantly increase traffic volumes and exposure along the Northern Expressway, directly benefiting Bunnings Munno Para West.”
The property is the fifth Bunnings Warehouse that Colliers has been appointed to sell across the country thus far in 2021.
The Bunnings Munno Para West property is for sale by Expressions of Interest closing on Thursday August 12, 2021. Agents expect interest in the vicinity of $45million.