A brand-new 7-Eleven service station and Zambrero drive-thru in the recently completed St Albans Convenience Retail Centre have been listed through Burgess Rawson from CBRE, providing investors with an opportunity to secure long-term leases to two of the nation’s best-known convenience and fast-food operators.
The offering comes on the heels of Burgess Rawson from CBRE’s highly successful sales campaign at the same development earlier this year where McDonald’s, Starbucks and El Jannah were sold individually for a combined $18.93 million. The transactions achieved yields as sharp as 2.92 per cent and attracted more than 150 bids from private investors across the country.
Developed by Vernacular Property and Capital Prudential, and completed this year, the centre occupies a prime position on the homebound side of Sunshine Avenue in Melbourne’s north-west. It sits just metres from the Western Ring Road on and off ramps, exposing the site to more than 252,000 vehicles each week. Its strategic location, supported by strong residential growth and major infrastructure projects including the Melbourne Airport Rail and Sunshine Station upgrade, has already proven its investor appeal.
The 7-Eleven tenancy is secured on a 12-year lease through to 2037, returning $390,000 per annum plus GST with fixed annual increases of 3.5 per cent. Zambrero committed to a 10-year lease through to 2035, paying $140,000 per annum plus GST with 3 per cent fixed annual increases. The tenancy incorporates a purpose-built restaurant.
Both businesses sit alongside complementary operators including a Local Laundry Lounge and Evie Networks electric vehicle charging station. In total, the fully leased centre generates a net income of around $581,000 per annum and offers a weighted average lease expiry in excess of 11 years.
Burgess Rawson from CBRE has also achieved strong results for Zambrero outlets nationally, with recent portfolio sales transacting in the 4.5 to 5 per cent yield range. The innovative restaurant has seen strong expansion with outlets now successfully operating in the US and UK.
Jamie Perlinger, Senior Director at Burgess Rawson from CBRE, said the calibre of the tenants and the strength of the location would ensure strong buyer demand.
“Convenience retail and fast food are among the most resilient investment sectors in Australia, and opportunities to secure long-term income from household names like 7-Eleven and Zambrero are increasingly scarce,” he said. “The combination of fixed rental growth, strong covenants and Vernacular’s proven track record of delivery makes this asset an appealing proposition for private and institutional investors alike.”
Expressions of Interest close on Wednesday 29 October at 3pm AED.
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