This article is from the Australian Property Journal archive
DESPITE ongoing challenges in the retail property market, investors continue to search for defensive large format retail assets, as evidenced by the sale of the Bunnings Collingwood site, which has cemented itself as the third highest price achieved for a freestanding Bunnings in Victoria.
A local private investor bought the 179-201 Victoria Parade property in a sale handled by Burgess Rawson’s Beau Coulter, Zomart He and Yosh Mendis.
Although the sale price is undisclosed, Mendis said it was the third highest price achieved for a freestanding Bunnings in Victoria.
The property was put on the market in late May with an asking price of $65 million, with the underlying land value reflecting around 75% to 80% of the purchase price.
Coulter said the campaign attracted more than 185 enquiries with seven bidders vying for the generational asset, adding that it became unconditional within three days of the EOI closing.
The 7,430 sqm building was converted from offices in 2016, when the property underwent a re-fit for Bunnings. It is set on a substantial 5,375 square metre site zoned Commercial 1 providing future development options.
“The asset provided one of the largest individual holdings in the area with the property attracting keen interest from a diverse range of buyers, domestic and international,”
Coulter said that the transaction was an outstanding result given the property sold to an investor on what will be a 3.1 year WALE at the time of settlement. He added that since 2021, Burgess Rawson has brokered four of the last eight freestanding Bunnings transactions including the $99.6 million sale of the store at Hoppers Crossing, which set a record return of 3.95%.
The sale price also reflects the property’s future development potential.
“In Collingwood, Urbis assessed the property as having the potential to build up to 14 levels based on recent approvals, while owners of sites nearby have been pushing for approvals up to 23 levels,” said He.
