A large format retail centre, anchored by one of Australia’s largest Bunnings Warehouse store, has been listed for sale ahead of a significant commercial property auction campaign. The 55,000sqm* Hoppers Crossing centre in Wyndham City is being offered through an expression of interest campaign which closes on 11 August, a week after Burgess Rawson concludes a national three-day auction event on 4 August. The Bunnings Warehouse store is one of the network’s largest, at 21,670sqm*, and is complemented by Amart Furniture. Amart recently renewed its year, resulting in a weighted average lease expiry of seven years, and a total net income of over $4.72 million. Almost three-quarters of this is paid by Bunnings, owned by ASX-listed Wesfarmers. Billy Holderhead, a partner of Burgess Rawson, said investor appetite in this sector remains strong, with considerable interest from the top end of the market.

“Given the scale of the Bunnings store, the quality of its location, forecast growth in the trade catchment, size of the landholding and its robust lease structure, we’ve backed the property as the best Bunnings freehold ever offered on the open market.’

The asset enjoys a high-profile location in what is the fastest growing local government area in Australia over the past two decades. Business consultancy Deep End Services reckoning the property to have the largest concentration of large format retail floor space in Victoria. Harvey Norman, The Good Guys, JB Hi-Fi and Barbeques Galore are also all located within 500 metres.

“With swathes of undeveloped residential land in Wyndham City there’s still much more growth to come, and the Hoppers Crossing LFR precinct is strategically placed to benefit from this,’ added Mr Holderhead.

Deep End Services Managing Director, Justin Ganly, added “LFR tenants within Hoppers Crossing will be trading in an annual spending market which is expected to grow by 90% – or $1.17 billion – over the next 14 years.’

The asset is being sold as part of a mammoth $350 million commercial property auctions and expressions of interest campaign beginning in August. This includes a Wattyl Paints store in Sunbury, which has signed a new 7-year lease to 2029, with options to 2034. Other large format retail sales reported by Burgess Rawson so far this year include a Bunnings leaseback in Mount Isa, Queensland, which sold for $16.2 million on a 4.29% yield – well above the pre-auction expectation of $14 million. Echua Toyota sold in March for $6.1 million at 4.55% yield despite a WALE of just 3 years. A National Tiles leaseback portfolio of three stores across Melbourne and Geelong sold in February for $21,38 million, reflecting a yield of 3.98%.

“2022 has been a standout for us in the large format retail sector in terms of yield benchmarks, activity and quality of property we’ve been appointed to bring to market,’ said Mr Holderhead.

The Property Tribune