Bunnings sells $180m worth of retail portfolio

bunnings-uki-st-albansBunnings has sold four properties across Australia and New Zealand via its sale-and-leaseback program to global real estate investment management firm, CBRE Global Investors for over $180 million.

Real estate consultancy JLL advised on the transaction on behalf of the seller, Bunnings.

Bunnings and CBRE Global Investors intend to grow the portfolio going forward.

Two of the assets are situated in Sydney, one is in Adelaide and one is in Auckland.

Three of the sites were under construction at the time the transaction completed and all have been sold subject to new 12-year initial lease terms (60 years including option terms).

“We are pleased to have acted for Bunnings on this strategic mandate to introduce a new major international landlord of their prime retail warehouses across Australia and New Zealand, with both parties willing to grow the portfolio over time,” said Stuart Crow, head of Asia Pacific Capital Markets, JLL.

The sale represented a blended yield in the low five per cent range and is another demonstration of the weight of international capital targeting Australian real estate, with the underlying capital in the Australian Unit Trust behind CBRE Global Investor’s acquisition being from offshore sources.

“We continue to see record levels of offshore demand and bidding across all of our campaigns in Australia,” said Stuart McCann, head of International Capital for Australia at JLL.

“This year alone, our platform has received over $25 billion of offers, of which more than $15 billion of this capital has been from offshore – attracted to Australia’s transparent markets, relatively stable political environment and long-lease structures with embedded growth.”

Meanwhile in New Zealand, Investore Property has sold three Bunnings stores to Stride Property Group for $78.5 million after renegotiating the terms of the leases.

Auckland-based Investore, which is still managed by Stride, will buy the three Bunnings stores in Rotorua, Hamilton and Palmerston North at an initial annual yield of 6.13 percent, with a 2.5 percent annual uplift fixed into future rent.

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