Two 7-Eleven service Centres in Melbourne and Canberra have hit the market via Stonebridge Property Group, each offering long leases in quality locations.
Melbourne based developers Strinzos Property Group and Dacland have put up for sale their brand new 7-Eleven anchored Service Centre in Tarneit.
Located in Melbourne’s burgeoning west, the service centre includes a 7-Eleven petrol station and convenience store; fast food restaurant KFC (Ground Lease); Magic Carwash and seven (7) individual food tenancies, returning circa $972,000 per annum net on a 11.3 year WALE.
Stonebridge Property Group Justin Dowers, who is managing an expressions of interest campaign for the property with Rorey James and Kevin Tong, said the sale could hardly have come at a better time.
“The owners have chosen to market this property at a very opportune time. Yield has become very hard to find as have quality assets. If you can locate an asset that also offers a very strong lease profile including, arguably, recession-proof convenience centres, you jump on it,’’ Mr Dowers said.
He said the underlying land component of convenience centre coupled with the major growth occurring out in the west will be very attractive to investors.
“This is one of the most strategically located convenience centres in the west of Melbourne given its significant corner exposure on both Derrimut and Dohertys Road. The position will continue to benefit from greatly increased traffic flows as more and more residential houses are being developed in the area,’’ added Rorey James.
The facility is located on over 10,000sqm on the corner of Derrimut and Dohertys Road with exposure to nearly 34,200 vehicles per day. Immediately surrounding the site is an abundance of new residential housing being developed by major groups including PEET and Dahua, with over 12,000 lots within the immediate catchment.
Mr James said the property’s rental income was estimated to grow 51% over a 15 year investment horizon based on the fixed annual rental increase to all tenants. He said purchasers would also benefit from the fact that the asset is brand new, providing substantial depreciation benefits and minimal capital expenditure requirements.
Mr Tong added “The service centre offering at Tarneit is very similar to a convenience shopping centre, but with fixed increases in the growth. The fixed growth in the rent will be highly attractive with investors especially given the majority of the tenants grow by 3% per annum”
“We are taking increasing enquiry from local investors who have been starved of opportunities. Add that significant pent up demand to that of interstate investors, with borders opening up again soon, and we anticipate seeing very strong competition for the limited amount of stock available for the traditional pre-Christmas rush,’’ Mr Tong said.
In Canberra, a high profile 7-Eleven is being offered for sale with a long 12-year net lease plus options taking the term out to 2052.
The site is strategically located at the gateway to the entrance of the Erindale Town Centre, anchored by Woolworths, along with other major retailers including McDonalds.
The property brings in a net income of $316,233*, with guaranteed income growth of 3% each year, 7-Eleven covers all usual outgoings.
Stonebridge’s Justin Dowers, selling the property alongside Phillip Gartland, Rorey James and Kevin Tong, said “with the planned nature of Canberra’s suburbs mostly accommodating one service station within its respective shopping centre precinct, the ability for fuel competition to enter the catchment was almost non-existent, providing a very profitable and long-term investment for both investors, and 7-Eleven”.
The underlying value of the 3,378 sqm’ landholding was a major benefit for investors according to Rorey James, who also noted that it’s strong access and visibility to the heavily trafficked roundabout made this site one the most sought after in the region.
The property, located on the corner of Ashley Drive, McBryde Crescent and Gartside Street, was formerly an Exxon Mobil, before it’s retail business in Australia was acquired by 7-Eleven in 2010.
The property is being sold via a Public Expression of Interest campaign, scheduled to close early December.
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