A prominent large format retail asset in Canberra’s bustling Fyshwick precinct has changed hands for $17 million, reflecting a yield of 5.70%, in a deal underscoring continued investor appetite for quality retail investments.
The national expressions of interest campaign run by Burgess Rawson from CBRE, Yosh Mendis and Geoff Sinclair as well as Burgess Rawson ACT, Guy Randall saw significant interest from investors across Australia through the campaign with 11 offers received at the close.
Located at 17 Iron Knob Street, Iron Knob Square comprises a fully leased 5,068sqm large format retail centre anchored by national tenants Chemist Warehouse, Auto One, and Ten Tops.
Burgess Rawson from CBRE Senior Director, Yosh Mendis said the sale illustrates the depth of demand for well-located large format retail centres, especially those anchored by nationally recognised tenants like Chemist Warehouse. Investors remain confident in the resilience of daily-needs retail, and Canberra continues to attract significant private and institutional capital looking for secure income streams.
The property occupies a substantial 10,163sqm landholding, benefitting from both on-grade and underground parking for over 150 vehicles. Eleven offers were fielded for the asset from purchasing groups across Australia, highlighting robust competition for secure retail investments amid tightening yields and limited supply.
Chemist Warehouse, recently merged with ASX-listed Sigma Healthcare (ASX: SIG), brings significant covenant strength as part of a pharmaceutical powerhouse boasting a $34.5 billion market capitalisation and a network exceeding 1,200 pharmacies. The property enjoys fixed annual rent escalations between 2.5% and 4%, enhancing its long-term income profile.
Strategically positioned opposite the Canberra Outlet Centre and surrounded by major national retailers including Bunnings, Officeworks, Amart, Harvey Norman, and Bing Lee, Iron Knob Square benefits from high traffic exposure and a strong local catchment. Its location, just five kilometres from Canberra’s CBD and 3.5 kilometres from Canberra International Airport further underpins the asset’s long-term investment appeal.
Mr Mendis said the sale to an interstate private investor adds to a string of significant retail transactions in the ACT, affirming investor confidence in large format retail as a robust and defensive asset class offering income growth and strong underlying land value.
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