This article is from the Australian Property Journal archive
QUANTA Investment Funds has sold the site of its Big W in the rural town of Atherton to a private investor $11.8 million, reflecting a 7.75% yield.
The 4,482sqm purpose-built Big W opened in 2006 and has dominated as the only DDS in the Main Trade Area of the Tablelands Region town, around 90k out from Cairns, with sales anticipated to grow by 1.5% each year through to 2036.
The deal, which is one of the largest commercial property transactions in the Tablelands region in more than two decades, was brokered by Joe Tynan, Josh Scapolan and Danny Betros from CBRE.
“Our four-week Expressions of Interest campaign generated over 70 enquiries and seven formal offers from high-net-worth private investors, syndicates, and institutional funds,” said Scapolan.
“The sale demonstrates there is continued buyer depth for regionally located, freestanding assets underpinned by strong covenants which provide income security and management benefits.”
The single level retail store at 8-20 Mabel Street asset occupies 1.11-hectares of land and includes substantial on grade car parking for 169 vehicles and an additional 72 public street car parks.
The Big W has a residual lease term of 3.75 years with options to 2041 and brings in a net income of $914,340 per annum, trading well above the discount department store average.
Currently, the tenant is also paying turnover rent, with the new owner as the landlord entitled to up to 4% of sales over a threshold.
Stacey Jones, CEO of the vendor Quanta Investment Funds added that the outcome of the sale served the best interest of both the fund and its investors.
“We’re really pleased with the level of interest and the result of this sale. It’s been a team effort and we are very thankful to everyone involved,” said Jones.
While Tynan noted the asset’s strategic position, which will enable it to fully benefit from the growing Atherton population.
The Main Trade Area’s expenditure is estimated to reach $617.5 million in 2022, before growing at a forecasted average annual rate of 3.2%, at that rate achieving $953.6 million by 2036.
