Bunnings Warehouses have become hot property as more investors look for Long WALE assets with strong covenants.
HomeCo Daily Needs REIT is the latest to join the growing list of Bunnings landlord with an agreement to acquire the Bunnings Seven Hills for $56.0 million representing a passing yield of 5.1%.
Other recent Bunnings acquisitions include EG Funds Management acquisition this week of the Rockdale store for $48.7m (5.4% yield), the Charter Hall acquisition of a portfolio of 6 stores in November for $352m (4.8% yield) and the acquisition of the Penrith store for $35m by a private family.
The Seven Hills property is a 22,300 sqm site located 30km north-west of the Sydney CBD and was owned by a property trust established by the controlling entities of the Canberra Raiders. The Trust acquired the Seven Hills asset and a number of other property investments in 2012.
The acquisition by HomeCo is proposed to be fully debt funded and is expected to be immediately accretive to FY21 FFO per unit. Gearing will remain within the target 30-40% range post-transaction.
Completion is subject to Bunnings not exercising its pre-emptive right to acquire the asset from the vendor on the terms agreed with HDN.
Further information in relation to the property and the financial impact of this transaction will be provided following satisfaction of this condition.
This acquisition continues HomeCo’s expansion into high growth metropolitan geographies like the Western Sydney growth corridor.
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