JLL secures 6% yields in SE Queensland 7-Eleven offerings
Investors secured two south east Queensland 7-Eleven service stations at auction yesterday, at an average 6.1% yield.
The Robina store fetched $4.3 million and the Nerang store sold at $4.7 million.
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.
The 4,032 square metre Robina outlet (pictured above) at 48 - 56 Commerce Drive had a current rental of $291,340+gst.
The 4,100 square metre Nerang outlet at 70 Beaudesert-Nerang Road had a current rental of $321,149+gst.
One of the buyers had missed out on his selection at the auction of seven offerings in Sydney on the day prior.
Six more 7-Eleven service stations in Melbourne, will be auctioned today.
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.
Chairman Russell Withers introduced the 7-Eleven concept to Australia, opening the first store in Oakleigh in 1977.
His grandfather, George, had a grocery store in South Yarra, in 1912 which became a chain of grocery stores.
The 7-Eleven chain operates more than 600 outlets and has recently expanded into Western Australia
Jones Lang LaSalle has been selling the stores in tranches on behalf of 7-Eleven since early 2011.
The purchasers have been attracted by land rich investment properties in prime locations with secure long-term leases and fixed rental increases.
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 franchisee occupies the site under licence meaning the landlord has no exposure to the franchisee, only to 7-Eleven directly.