Two Norwest properties in Sydney indicate premium investments remain sought after

Premium investment properties remain highly sought after by private, high-net-worth investors, according to Colliers International.

Paul McGlynn and Harry Bui of Colliers have sold McDonald’s Bella Vista (pictured above) to a private Asian investor from Melbourne for $6.65 million on a net yield of 3.1%. 

The acquisition was for a 2,885sqm long-term ground lease. 

McDonalds Australia constructed a brand-new single level restaurant with dine-in and drive-thru take-away facility, open to the public since May 2019.

Mr McGlynn and Mr Bui will be also taking the adjoining Shell Service Centre Bella Vista (pictured below) to the market for sale by international expressions of interest.  

Both properties are located in a gateway position at the entrance of Norwest Business Park within the north-west growth corridor in Sydney’s Hills District.  

On a 2,813sqm site, this new Shell service station with an annexed café is anticipated to receive high levels of interest from both local and international investors.

The opportunity benefits from its premium location in Norwest Business Park, long WALE profile of 10 years by income, strong annual rental escalation, and head lease to Viva Energy Australia with a fully leased net passing income of around $604,544 per annum. 

“Premium investment properties with long leases such as a freestanding petrol station leased to Viva Energy, 7-Eleven, Caltex, BP or freestanding fast food sites like McDonald’s are currently very sought-after,” said Harry Bui, National Director, Investment Services at Colliers International. 

“Private high net worth investors are the most common buyer profile within the sub-$20million investment market, while both property syndicates and consortiums showed increased interest towards premium investment assets with longer WALE’s and company leases to national blue-chip corporate tenants.” 

There have been several significant national portfolio sales for premium investments in the past year.

This includes; 33 7-Eleven petrol stations, which sold for $156 million in October 2019 and February 2020 with an average yield of 4.76% and; 25 Caltex petrol stations sold for $133 million in November 2019 with strong underlying land values for future development.  

Charter Hall also took a 49% stake in a portfolio of 225 BP petrol stations in Australia, worth $1.7 billion with a weighted average lease expiry (WALE) of 20 years which was the biggest deal of 2019. 

Paul McGlynn, National Director, Industrial at Colliers International said that the Norwest area where both properties are located will benefit from major State and Federal Government projects.

“Norwest is in the suburb of Bella Vista which is surrounded by major State and Federal Government infrastructure projects, specifically the North-West Metro which opened in May 2019, North-Connex due to open next month, the re-development of Parramatta CBD (11 kilometres South) and establishment of the new second Western Sydney Airport (43 kilometres West).”

“These infrastructure projects coupled with substantial increases in new residential dwellings and population growth locally will rejuvenate and promote Western Sydney, helping the area to become a major economic powerhouse.”

Colliers International will also be bringing a brand-new, flagship BP in Tighes Hill, Newcastle to market.