First Bunnings sale of 2017 in SA to test investment appetite

Berri Bunnings Warehouse in South Australia’s Riverland region is on the market, representing the first sale of a Bunnings-occupied asset for 2017.

Located at the corner of Hoskins Road and Sturt Highway, the new hardware store opened in May 2016 and is the first stage of a master plan for The Riverland Complex Site on the Old Sturt Highway in Berri.

CBRE’s Joseph Du Rieu, Justin Dowers, Alistair Laycock and Jordan Kies, are selling the property on behalf of Adelaide-based developer Pat & Co Pty Ltd – headed by Tony Moro.

He added that Bunnings committing to being the property’s anchor tenant was a vote of confidence for the precinct.

“With one of the country’s most recognised retailers taking a long term lease on the first stage of the development, we can take great confidence that other retailers and business owners will be drawn to the development of Riverland Complex Bulky Goods precinct stage two and three over the coming years,” Moro said.

The 6,557 sqm store was developed in a similar design as the Victorian Swan Hill Bunnings, - which sold in late 2015 for a yield of 5.11 percent - and constructed with a long-term view to accommodate the growing population of the Riverland region.

CBRE’s Justin Dowers said the property marked the first Bunnings warehouse investment offered for sale in Australia for 2017.

“Bunnings warehouse investment properties have been a highly sought after investment vehicle over the past two or so years – a factor that is helping compress yields to as low as 5 percent in some instances,” Dowers said.

He said the lack of retail investment opportunities such as this is also driving investors to compete for assets in regional locations. Furthermore, “the consistent performance and revenue growth of Bunnings has been a key attraction for private and institutional investors,” he added.

In late 2016, the Yarrawonga Bunnings in Victoria was sold off the plan for a record yield of 4.94% – representing the first Bunnings warehouse to be sold to a mainland Chinese investor.