Yields tighten in latest 7-Eleven Sydney service station offering
Investors secured seven NSW offerings of 7-Eleven service stations at auction yesterday, but the average 4.6% yield was tighter than the 6.8% two years ago.
Generating $33.08 million in sales, the top price was $6.01 million for a LANE COVE Road, Macquarie Park, North Ryde property (pictured above), which sold on a net yield of 4.96%.
The other service stations sold on net yields of between 3.85% in Dee Why and 5.04% in nearby Mona Vale - all with 15-year leases to 7-Eleven.
The 15-year lease terms that commenced between 2010 and 2012, come with three five-year options; guaranteed fixed 4% annual rent increases, with the tenant responsible for all outgoing costs except land tax.
JLL’s John Macree, Leslie Cheng and Dylan McEvoy marketed the properties on behalf of the Withers Barlow Property Trust.
More 7-Eleven service stations, two in South East Queensland and six in Melbourne, will be auctioned this week.
Russell Withers, worth an estimated $665 million according to the recent BRW Rich list, jointly owns the rights to 7-Eleven in Australia with his sister, Beverley Barlow.
Jones Lang LaSalle has been selling the stores in tranches on behalf of 7-Eleven since early 2011.
The stores were purchased as part of 7-Elevens acquisition of 250 retail sites from Mobil Retail in 2010.
In 2011 seven properties in Thomastown, Clifton Hill and Noble Park in Victoria, Blacktown East, West Gosford and Long Jetty in NSW and Robina in Queensland were successfully auctioned by Jones Lang LaSalle with net yields ranging between 7.28% and 7.95%.
The purchasers have been attracted by land rich investment properties in prime locations with secure long-term leases and fixed rental increases.
7-Eleven Stores is the biggest convenience retailer in Australia, operating about 600 stores.
Many of the buyers were self-managed super fund retirees looking for passive cash flow investments, seeing the opportunity as ticking the box for a premium tenant on long-term lease, high underlying land value, rental growth guarantee, and high-profile exposure locations.
The New South Wales 7-Eleven convenience store and service station investments sold:
- Ashfield, 132 Hume Highway – 1,524 square metres, sold for $4.9 million with a yield of 4.21%
- Camperdown, 198 Parramatta Road – 1,107 square metres, sold for $3.65 million with a yield of 4.72%
- Dee Why, 940 Pittwater Road – 1,867 square metres, sold for $5.05 million with a yield of 3.85%
- Mona Vale, 38 Barrenjoey Road – 1,573 square metres, sold for $4.325 million with a yield of 5.04%
- Macquarie Park / North Ryde, 404 LANE COVE Road – 1,716 square metres, sold for $6.01 million with a yield of 4.96%
- Sans Souci, 476 Rocky Point Road – 1,538 square metres, sold for $4.55 million with a yield of 4.96%
- St Ives, 157 Mona Vale Road – 2,257 square metres, sold for $4.6 million with a yield of 4.94%.