This article is from the Australian Property Journal archive
PRIVATE finance and investment house Wingate has bolstered its growing portfolio with the acquisition of a Shell and Coles Express service station in Port Melbourne from Melbourne investor David Feldman for $32.12 million on a tight 4.8% yield.
The transaction was handled by Chris Jones of Dawkins Occhiuto.
The sale is a major windfall for Feldman who purchased the 62 Cook Street asset for $22.5 million from developer MAB in 2016, which was also handled by agents Dawkins Occhiuto.
The acquisition is first of two investments Wingate is closing this month.
It comes hot on the heels of Wingate teaming up with Perri Projects last month to launch a $100 million industrial park in West Melbourne.
Wingate managing director Mark Harrison said the company is positive about the prospects for logistics and industrial property in inner Melbourne.
Wingate is targeting offices, industrial and retail investments between $20 and $100 million.
Jones said the service station property attracted a substantial level of interest from a broad range of local, interstate and off-shore buyers including hi-net worth, syndicate, and institutional interests.
He added that it had been a very satisfying result for both vendor and purchaser providing significant capital growth over the last five years and extremely good future prospects particularly around plans for new development in the immediate vicinity.
“This is a property that appealed on a number of fronts including the brilliant location on the West Gate Freeway and central positioning within the 480 hectare Fishermans Bend Urban Renewal project which will significantly enhance potential trade catchment,” he continued.
“It also offered a secure, blue-chip lease profile and excellent capital growth prospects that may well parallel development of Fishermans Bend and the anticipated population growth of 80,000 by 2050.
“It is no real surprise that service station/convenience store assets are outperforming other sectors during the pandemic – and it seems likely in the subsequent recovery phase – courtesy of secure, long term leases to national tenants and, with borders remaining closed, exposure to rapidly increasing domestic travel.
“Given those factors remain in play we are going to see increasing downward pressure on yields in this sector, particularly in the best locations,” Jones said.
Located adjacent to a Westgate Freeway exit point, the property includes a Shell/Coles Express, four food tenancies and drive-thru service points to Hungry Jacks and Red Rooster, covering 696 sqm of NLA, set on a 10,000 sqm site.
The property has 8.8 year WALE by income including leases to Viva Energy, Hungry Jacks and Red Rooster and was sold with a passing net income of $1.545 million per annum with 60% anchored by Viva Energy under a triple net lease paid yearly in advance while 90% was secured for at least 9.7 years. The sale also included 12 month rental guarantees on two vacant areas of the property.
