Stonebridge Property Group has released a new market update, explaining the noticeable uptick in investor interest and transaction activity across Bunnings Warehouse assets.
Driven by falling debt costs, heightened demand for defensive income streams, and the strong covenant of Wesfarmers-backed Bunnings, the asset class is once again commanding national attention from private and institutional capital alike.
“Bunnings Warehouse investments have re-emerged as a favoured asset class,” said Justin Dowers, National Partner at Stonebridge. “With declining swap rates and rising demand for inflation-hedged investments, the fundamentals have aligned to create an ideal entry point. We’re seeing activity from both private investors and institutional investors, all chasing the same thing – certainty of income.”
Key drivers of the resurgence include:
- Easing Debt Costs – The 3-Month BBSW has dropped below 4%, reducing debt costs and enhancing yields for leveraged buyers.
- Return of Core Capital – With volatility in equities, bonds, and offshore property markets, institutional and private investors are reallocating capital into stable, income-producing real estate like Bunnings.
- Rarity of Supply – Rising construction and land costs are making Bunnings-style assets increasingly difficult to replicate, particularly in metropolitan areas.
- Embedded Upside – Current rental levels, often aligned with industrial rates, present a compelling opportunity for rental uplift through conversion to alternate uses.
- Net Lease Structures – Net leases combined with annual CPI or fixed rent increases protect investors from inflation and support sustainable income growth.
Bunnings’ revenue has nearly doubled over the last decade with a 10-year CAGR of 7.15%, reinforcing its position as one of the most desirable tenants in the Australian commercial property landscape.
“Recent transactional evidence demonstrates this renewed confidence, with assets trading at 5% yields in both metropolitan and regional locations,” said Philip Gartland, National Partner. “Notable sales include Bunnings Wonthaggi, Albion Park and Taree, with pricing metrics reflecting the resurgence of core capital into the sector.”
Stonebridge is currently marketing two dominant Queensland Bunnings assets – Bunnings Hervey Bay and Bunnings Mount Isa – both 2022 built assets with long WALEs and strong income profiles. Public Expressions of Interest for both close Wednesday 9th July 2025.
“With limited new supply and renewed investor appetite, we believe the Bunnings market is entering a new phase of activity,” said Carl Molony, National Partner. “It’s a compelling time to be both buying and selling.”
For more information or to access the full report, contact the Stonebridge team.
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