BWP Trust adds to bulky goods property portfolio with $27 million Gladstone home centre acquisition

Larry SchlesingerDecember 8, 2020

BWP Trust has added the Gladstone Home Centre to its bulky goods property portfolio, paying $27 million for the 21,791-square-metre retail centre just outside the business centre of Queensland mining hotspot, Gladstone.

The centre is anchor tenanted by Bunnings and Harvey Norman. It was previously called the Centro Gladstone Home and formed part of Centro’s MCS 37 property trust.

BWP Trust primarily invests in Bunnings bulky goods stores.

The Gladstone acquisition increases the number of Bunnings Warehouses owned by the trust to 67 and brings the total number of properties in the portfolio to 73.

The purchase price of $27 million (plus acquisition costs of approximately $1.6 million) reflects an initial yield of 8.84%.

The property is fully leased with a passing net annual rental income of approximately $2.38 million and has a weighted average lease expiry (by income) of approximately 4.4 years.

Bulky good stores remain a sought after retail asset, with BIS Shrapnel noting in its September 2012 Building Industry Prospects report that bulky goods centres and neighbourhood shopping centre buildings have outperformed the retail sector “and this is anticipated to continue in the near future".

The Gladstone home centre sale comes as the Australian Financial Review reports that ASX-listed property trust Charter Hall Group is in negotiations to acquire a $230 million portfolio of Bunnings Warehouse properties across Australia from Wesfarmers.

Competition in the bulky goods DIY sector has heated up with Woolworths looking to expand its DIY Masters chain.

Burgess Rawson’s Darren Beehag and Dean Venturato are currently seeking buyers for an 8,300-square-metre Bunnings warehouse in Bathurst with an asking price of $8 million – reflecting a yield of around 8.7%. The centre has a net income of $693,000.

Bunnings plans to open 18 warehouses in 2013 with plans to open between 10 and 14 annually in subsequent years. In total there are more than 80 warehouses in the pipeline.

The Gladstone home centre stands at 20 Dawson Highway in Clinton, about eight kilometres south west of Gladstone’s CBD.

The statement accompanying the acquisition of the bulky goods centre notes that Gladstone’s economy "is supported by a variety of refining, chemical and mining industries and it has one of the world's top five coal export ports, handling in excess of 50 million tonnes of coal per annum".

"The estimated current trade area population is approximately 70,000 residents, including over 55,000 residents in the primary catchment." 

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

Editor's Picks