Oxenford Kmart sold before opening on record low yield

Oxenford Kmart sold before opening on record low yield
Jonathan ChancellorDecember 7, 2020

Kmart has committed to a new freestanding 6,200 square metre store at Oxenford, due for completion late 2015.

Savills has now sold this new development as an investment, with a 12-year lease to Kmart.

It sold to a Melbourne based private investor for just under $22.7 million, representing a record low yield of 5.95%.

The sub-6% yield eclipses the recently set record of 6.04% achieved in the sale of the Masters Home Improvement store in Melbourne’s Williams Landing.

The Kmart store was offered in a marketing campaign conducted by Peter Tyson and Jon Tyson of Savills.

Peter Tyson said the strong sale result followed overwhelming investor interest in the asset, which saw more than 160 separate buyer enquiries throughout the short campaign.

He said enquiry was received predominately from private investors but also included syndicators, REITs and fund managers.

The sub-6% yield result is understood to represent the lowest yield in Queensland for a freestanding retail asset in this higher price range and one of the lowest results recorded nationally for a Discount Department Store asset.

The property comprised a new 6,200 square metre freestanding retail building wholly leased to Kmart Australia Ltd on a 12 year term with four six year options. The property features on grade parking for 184 vehicles and a site area of 13,550 square metres. 

The offering was expected to attract strong interest and pricing in excess of $20 million.

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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