Tenanted by Discount Drug Stores, strata-titled investment property sells off-market for $2.6 million to a private Brisbane investor, fending off four other local investor offers.
A retail tenancy within the Hub Convenience Centre in Burpengary was sold for $2.6 million to a Brisbane based private investor reflecting a net yield of 7.5 per cent.
This 356sq m strata-titled investment is occupied by Discount Drug Stores, an established Queensland business who has leased the property until 2023 with an option of eight years.
Stephen Kidd, Director of Retail Investments at Colliers International marketed the retail tenancy on behalf of the investor owners from the Gold Coast. Mr Kidd said the property was sold off-market after attracting four offers from Brisbane and one from Gold Coast based investor.
“Strong performing tenanted properties in the Moreton Bay region have begun to attract a lot of interest because it is a high growth corridor with a lot of potential.
“We experienced similar sort of investor enquiry for this property as we did for Ningi’s 7 Eleven Travel Centre which we sold for $6.1 million earlier this year.
“This particular retail investment ticked all the boxes with its secure income stream of $192,000 per annum derived from a strong pharmacy business on a lease term of 17 years including options.
“It offers a prospective net return which is positive from day one, and substantially higher than similar priced residential investment property alternatives.
“Recently we have also experienced solid offshore interest for retail investment property in Queensland, but in most cases it doesn’t end in a transaction as they are not prepared to pay sharper yields like our local investors are.
“Local investors are looking at long term property fundamentals when purchasing retail investments whereas some of the offshore investors tend to just focus on getting higher than normal return which is not achievable in the current market.”
The Hub Convenience Centre comprises four separate buildings and 27 individual strata-titles across 4,083sq m gross lettable area. It is anchored by a successful medical precinct, a food precinct with Spar Supermarket, a large child care centre and services.
Mr Kidd said the centre has a focus on convenience and services, with the medical component trading very strongly and attracting substantial patronage from the surround suburb of Burpengary East.
“The Burpengary trade area has experienced population growth of 5.4 per cent over the past ten years, and this will continue to underwrite the future strength of the convenience centre. This is already evidenced in the expansion of medical users within the complex.”