High yields for 7-Elevens continue to attract investors

The appeal of 7-Eleven service stations has not diminished, with a Mount druitt store in NSW selling for $4.04 million as part of a Burgess Rawson commercial property portfolio auction in Sydney yesterday.

The sale to a Victorian buyer was negotiated soon after the auction with the sale prices reflecting a yield of 7.8% on income of $316,000.

This is in the upper range of yields achieved for 7-Eleven service stations for 2011.

About $90 million worth of refurbished 7-Eleven service stations across NSW and Victoria have changed hands this year, with yields ranging from 4.6% to 8.5%.

The 2,500-square-metre Mount druitt store, located at 2 Luxford Road, was sold by a private investor and is not part of the portfolio being sold in batches by 7-Eleven and acquired from Mobil in May 2010.

It sold with a new 15-year lease that commences in January 2012 with two renewal options of five years each. It is leased to 7-Eleven with fixed 4% annual rent increases.

Charles Gonzalez from Burgess Rawson, which marketed and auctioned the 7-Eleven, says there was strong interest in the property at what was a well- attended auction.

Other properties to sell under the hammer include three retail shops in Cabramatta in Sydney’s west.

The property was bought by one of the tenants for $1.53 million, with Gonzales noting that this was $200,000 above the reserve.

With annual income of $161,000 this reflects a yield of 10.6%.

The property is leased to a pharmacy, doctor’s surgery and mini-supermarket.

 

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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