This article is from the Australian Property Journal archive
THE Muir family has pocketed around $150 million from the sale of its 15-asset portfolio of The Good Guys stores, after a private Sydney buyer picked up the Warrawong store in Wollongong for $7.15 million.
The portfolio sale was prompted by ASX-listed JB Hi-Fi Limited’s $870 million acquisition of the retailer in 2016, which the Muir family had established in Melbourne’s Essendon in 1952, and retained control of the freeholds following the takeover.
In July, nine of the 15 properties sold for a combined $92 million, including five to a Sydney-based investment fund for $63 million, and the remainder individually.
Savills agents Jesse Radisich, Nick Peden and Clinton Baxter sold the final property, the 5,284 sqm Warrawong corner site at 79-85 King Street, via private sale. It has a 2,640 sqm outlet with a new 5+5-year lease to the retailer, with current return $546,697 per annum plus GST, reflecting a circa-8.4% yield. The sale price also reflected a building rate of $2,708 per sqm.
The property is located in a bulky goods precinct that includes Forty Winks, Fantastic Furniture, and Bunnings, and is close to Warrawong Plaza.
Of the 15 assets put to the market, 12 were located in Victoria and New South Wales. The Victorian properties are in Ballarat, Bendigo, Geelong, Hoppers Crossing, Mildura and Thomastown, whilst the NSW contingent includes sites at Albury, Ballina, Bathurst, Caringbah, Coffs Harbour and the Warrawong site. The remainder are at Cairns and Ipswich in Queensland, and O’Connor in Western Australia.
Savills also negotiated the nine-asset transaction that included the assets in Thomastown, Geelong, Bendigo, Ballarat, Caringbah, Ballina, Ipswich, Cairns, and O’Connor.
The sale prices ranged from $5.2 million for the Bendigo property, up to almost $30 million for the Caringbah property, while yields came in from around 6.25% for the capital city properties up to almost 8.00% for those in regional locations.
The 2,496 sqm Coffs Harbour outlet on the 5,916 sqm site at 300 Pacific Highway traded in October for $5.175 million at a 7.49% yield, also with a 5+5-year lease.
“We are witnessing renewed strength and confidence in the large format retail sector, as investors continue to digest the presence of Amazon in Australia,” Baxter said. “They’re now recognising that the potential impacts for the commercial property market are likely to be insignificant.”
A BIS Oxford report released earlier this year suggested that the versatility of large format centres and recovery in consumer spending will bring greater returns for landlords compared to traditional shopping centres over the next decade, with projected returns of around 8.5% over the next five years.
Australian Property Journal
