This article is from the Australian Property Journal archive
CHARTER Hall has forked out $65.3 million in buying a near-new Bunnings warehouse on the New South Wales South Coast, with the tight yield of 4.0% showing off the heightened competition for the hardware chain during the pandemic.
The full-format South Nowra warehouse at 159 Princes Highway was transformed last year from a mid-sized format offering by Nowra Property Group and has 11 years remaining on the 12-year lease term. It is the only Bunnings in the trade area and the largest on the South Coast.
The property has a 240 metre frontage and a land area of 29,350 sqm, with a gross lettable area of 17,982 sqm and parking for 428 cars.
The 4% yield matches that of Cook Property Group’s $58.6 million acquisition of a Bunnings under development in November.
Charter Hall will hold the asset in the unlisted Direct Industrial Fund No.4 (DIF4).
“DIF4’s acquisition of Bunnings Nowra adds to the Fund’s growing portfolio of high-quality properties with strong tenant covenants,” Charter Hall Direct CEO Steven Bennett, said.
“Bunnings is arguably one of Australia’s most trusted businesses and we are proud to add its Nowra store to the fund’s long-term and resilient tenants.”
This acquisition raises the number of Bunnings properties across Charter Hall’s portfolios to a total of 66, representing a gross value of almost $3.7 billion. DIF4 bought a Bunnings warehouse facility in Adelaide’s Munno Para West six months ago for $48.8 million, and late in 2020 Charter Hall’s wholesale partnership picked up a portfolio of six Bunnings assets for $353 million.
“The acquisition of Bunnings Nowra is in line with DIF4’s strategy to invest in quality properties in premium locations with high capital growth potential and long weighted average leases,” Charter Hall Direct fund manager, Julian Menegazzo said.
The sale of Bunnings Nowra was brokered by Sam Hatcher from JLL.
DIF4 delivered a 12-month total return of 21.1% over 2021 and remains open for investment. It has a $2.5 billion property portfolio and is currently offering investors a distribution yield in excess of 5% per annum.
