Investor interest expected for 7-Eleven portfolio auction

An auction of the next tranche of 7-Eleven convenience stores is expected to attract interest from private investors, particurlarly those with self-managed super funds. 

The 10 stores are all based in NSW within a roughly 80-kilometre radius from the Sydney CBD.

The Sydney auction is schedule for November 9 and is the third auction of 7-Eleven properties in New South Wales this year.  Previous auctions attracted yields of between 6% and 8%.

The stores, purchased as part of 7-Eleven’s acquisition of 250 retail sites from Mobil Retail in 2010, include service stations, convenience stores and customer parking.

All stores come with 15-year leases to 7-Eleven with three renewal options of five years each.

They range in size from 1,200 square metres in Yagoona on the Hume Highway to a 4,300-square-metre site in Wilson Street in St Mary’s. 

The sale is being handled by John Macree, NSW head of sales and investments at Jones Lang LaSalle, who says prices and yields are expected to vary greatly given the different sizes.

Macree says the NSW portfolio will appeal to “self-funded retirees including those with self-managed super funds because of the stable long-term income stream and the banks’ willingness to offer attractive finance packages on these style of assets”. 

He says that following the success of the previous campaign, a number of prospective buyers had already been making enquiries. 

“The last auction attracted a number of keen bidders and we expect that some of those who missed out on an opportunity last time will be heading to the auction room again in November. This portfolio is attractive for a number of reasons including the quality of the tenant, long-term leases and prime locations,” he says. 

During a previous auction in July 12 out of 13 sites sold, with a 5,575-square-metre Hoppers Crossing site on the corner of Old Geelong and Heaths Road achieving the highest price of $3.49 million. 

The properties that will be up for auction in November include: 

The 7-Eleven company has 32% of the convenience retailer Eastern Seaboard market. The company generates approximately $3 billion in sales per year.