Savills sell nine properties leased to The Good Guys in $92 million disposal

Nine separate bulky goods retail properties leased to electronics retailer The Good Guys across four states have sold for a total of $92 million.

The deals were the largest group transactions of its kind in the Australian market this year, according to Savills which negotiated them on behalf of the Muir family.

The properties are located in Victoria (Thomastown, Geelong, Bendigo and Ballarat), New South Wales (Caringbah and Ballina), Queensland (Ipswich and Cairns) and Western Australia (O’Connor), and all are leased long-term to The Good Guys, a wholly owned subsidiary of ASX-listed JB HiFi.

Sales range from $5.2 million for the Bendigo property, up to almost $30 million for the Caringbah property.  

Purchase yields range from around 6.25% for the capital city properties up to almost 8.00% for regional properties – compelling returns for a yield starved market.

A Sydney-based investment fund and sell the other properties individually.’’One investment group

Selling agents Clinton Baxter, Nick Peden and Steven Lerche of Savills said the sale had been one of the most anticipated divestment of Australian retail stock in the last 12 months.

"We expected strong interest from private investors seeking individual properties, but were particularly surprised by the numerous portfolio buyers seeking multiple properties across several states,’’ Baxter said.   

“We simply couldn’t satisfy all the portfolio offers due to overlapping property requirements, and ultimately chose to transact 5 of the properties with a Sydney-based investment fund and sell the other properties individually.’’

Peden said that the wide price range of the assets, exceptional main road locations in key commercial precincts, attractive rental returns, together with blue-chip tenancy profiles appealed to a wide range of investors ranging from SMSFs, private investors, syndicators and property funds, whether based locally or off-shore.

"With The Good Guys being owned by ASX-listed retail powerhouse JB Hi-Fi Limited, investors feel extremely comfortable with the long-term security of the investment. 

"All properties are in proven commercial locations, with a long history of successful trade” Lerche said.

The properties are all owned by the Muir family. 

Savills will be selling several additional properties also leased to The Good Guys in coming weeks, to complete the divestment.

“Of the original portfolio of properties we have been handling for the Muir family, it was crucial to the process that we finalised the single portfolio transaction before allowing individual properties to be sold. 

Now that has occurred, we are busy transacting the individual properties, with the opportunity offering exceptional value for investors at attractive yields” Mr Baxter said.

The Good Guys was founded in Melbourne’s northern suburbs in 1952, and remained a family owned business until late 2016 when the company was purchased by JB Hi-Fi Limited for $870 million.

The business has grown to be one of Australia’s leading retailers in the sale of white goods and electronics, with an approximate annual revenue of $2.1 billion.