Rare Bunnings asset sells for $28.15M: first on-market sale in two years
City of Newcastle has successfully acquired the Bunnings Taree property for $28.15 million, representing a yield of approximately 5.0%. JLL’s Sebastian Fahey, David Mahood and Nick Willis exclusively sold the asset on behalf of Charter Hall through an On-Market Expressions of Interest (EOI) campaign.
Sebastian Fahey, Senior Executive, JLL, commented, “The Bunnings Taree transaction marks a significant milestone as the first Bunnings property to be sold on-market in over two years. The campaign was intensely contested due to the rarity, culminating in a competitive EOI process that concluded with a third and final round where interested parties submitted offers on contract.”
The campaign attracted significant interest regardless of the location, totalling 173 private investors enquiries and 8 bids at EOI close.
David Mahood, Senior Executive, JLL stated, “The Bunnings Taree transaction underscores the ongoing demand for quality retail assets, particularly those with strong tenant covenants and long-term lease agreements. It reflects the resilience of the retail property market in regional areas, as investors continue to seek opportunities outside major metropolitan centres.”
Bunnings transaction yields have closely followed the 10-year treasury bonds with a 5-year historical average spread of 225 basis points.
“Recent Bunnings transactions have demonstrated a 99-basis point spread over the current 10-year treasury bond, effectively closing the historical gap and demonstrating the strong demand for the resilient Bunnings covenant in the market.” Mr Mahood added.
Recent Bunnings Transactions:
Property State Sale Date Sale Price Yield Sale Rate ($/sqm) Bunnings Taree NSW Apr-24 $28,150,000 5.03% $2,060 Bunnings Albion Park NSW Nov-24 $42,000,000 5.02% $3,094 Bunnings Seaford SA Jan-24 $26,250,000 5.68% $2,648 Bunnings Wonthaggi VIC Sep-24 $22,500,000 5.00% $2,460 Bunnings Young NSW Sep-23 $10,500,000 5.50% $1,899 Bunnings Collingwood VIC Jul-23 $63,500,000 4.94% $8,546 Weighted Avg. – – – 5.11% $4,538
Historical Bunnings Transactions:
Property State Sale Date Sale Price Yield Sale Rate ($/sqm) Bunnings Hoppers Crossing VIC Aug-22 $99,600,000 4.29% $5,137 Bunnings Albury NSW Jul-22 $43,750,000 4.00% $2,302 Bunnings Mt Isa QLD May-22 $16,202,000 4.29% $2,889 Bunnings Swan Hill VIC May-22 $18,050,000 3.99% $2,708 Bunnings Nowra NSW Jan-22 $65,343,750 4.00% $3,634 Bunnings Hervey Bay QLD Nov-21 $58,600,000 4.00% $3,364 Bunnings Delacombe VIC Oct-21 $45,400,000 4.15% $2,622 Bunnings Kempsey NSW Sep-21 $28,550,000 4.19% $2,596 Weighted Avg. – – – 4.12% $3,557
Acquired under City of Newcastle’s Future Fund the acquisition is expected to provide a steady income stream, contributing to financial sustainability and benefiting the community in the long term. The property features a new 10-year net lease extension to Bunnings, with options extending until 2082, situated on a 38,210sqm landholding in Taree’s expanding northern corridor.
City of Newcastle was advised by Matt Kearney, National Director of Capital Markets for Commercial Collective.
The purchase exemplifies the strategic approach local councils are taking to ensure long-term financial stability through diversified investments. Earlier this year, JLL also facilitated the sale of the Echo Point Lookout to Blue Mountains City Council for $16.2 million, demonstrating the increasing interest of local governments in strategic property investments.
Related Articles
