This article is from the Australian Property Journal archive
A BUNNINGS Warehouse in Greater Bendigo which brings in over $1 million each year has hit the market, offering potential buyers a high profile offering with an exceptionally secure covenant in this asset type tested for its resilience.
The freestanding 11,606sqm Bunnings Warehouse Epsom, located on 91-107 Midland Highway, sits on a 27,010sqm zoned Commercial 2 site, around 5km north of the Bendigo CBD and 135km out from the Melbourne CBD.
Justin Dowers and Kevin Tong from Stonebridge Property Group, in conjunction with David Marks from Killen Thomas , have been appointed to market the property, via a public expressions of interest campaign.
“We are continuing to see yields for these types of investments sharpen disproportionately to other asset sectors because of the exclusivity of the tenant and the quality of the lease, which is net in nature and provides fixed annual rental increases,” said Dowers.
Bringing in a net income of $1,606,000, the 2012-built hardware store asset is being sold with a 12-year net lease to 2027 plus options through to 2052 to Bunnings, with 3% fixed annual rental increases.
“The market for Bunnings Warehouse investments has further improved over the last 12 months given how well they have performed in and out of lockdown restrictions,” added Dowers.
Recent Bunnings assets sold include the Bunnings Hervey Bay, QLD, which was purchased for $58.6 million, representing a 4.00% yield, as well as the $48.8 million Charter Hall acquisition of Bunnings Munno Para at a market yield of 4.22%.
The Bunnings is located on a dominant corner site in the regional city’s northern growth corridor, sitting just 200 metres from Epsom Train Station and the Epsom Shopping Centre, as well as 1 km from Bendigo Airport.
The asset will also benefit from its placement in the rapidly growing City of Greater Bendigo area, which on top of notable infrastructure investment, is forecast to see 1.4% population growth each year from 2021 to 2036. Greatly eclipsing the broader Victorian rate of 0.91% per annum.
“The growth in Bendigo is as strong, if not stronger than most metropolitan cities. Dwelling approvals, infrastructure investment and tourism help drive the City of Bendigo to being the 3rd largest city in Victoria,” said Tong.
The expressions of interest campaign for Bunnings Warehouse Epsom is scheduled to close on 26 May, 2022.
“The long and short of it is, if you buy a commercial property in regional Victoria, you get 50% off your stamp duty and that is going to be worth quite a significant amount of money especially given the total quantum at Bunnings Epsom,” concluded Tong.
