Fifteen 7-Eleven stores sold in $78m auction bonanza

One of the year’s most significant retail property offerings has achieved a stunning result, with a huge portfolio of 7-Eleven fuel convenience outlets selling at a Burgess Rawson auction event.

The 15 properties sold at a 100% clearance rate for almost $78 million combined, reflecting the demand for assets leased to Australia’s number one convenience retailer.

The stores, spread across New South Wales, Victoria, Canberra and Western Australia, sold on a weighted average yield of just 4.7%, with four sites trading at below 4%.

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A 7-Eleven at Campbellfield in Victoria topped the list of sales at $8.52 million, selling on a 4.54% yield, while a Liverpool property set a yield benchmark of 3.82%, selling for $5.75 million.

Another site at Braddon in the ACT achieved $7.1 million and a 4.11% yield amid heating bidding at the combined Portfolio Auction event in Melbourne and Sydney.

Properties at Clyde and Seven Hills in New South Wales and Mornington on Melbourne’s fringe also traded on sub-4% yields, while another site at Marks Point was the value buy, with its $4 million sale price equating to a 6.07% yield.

The 7-Eleven outlet at Clyde in Sydney.

7-Eleven Group Head of Property, Jimmy Mouzakiotis, said the results reflected the pent-up demand for 7-Eleven properties, which boast the fuel retail industry’s most sought-after lease covenants.

“The buyers were a mix of existing 7-Eleven landlords who knew the quality and underlying value of the assets they were purchasing, and first-time purchasers who were determined to own a 7-Eleven,” Mouzakiotis says.

“In doing their due diligence in the lead-up to the auction, investors fell in love with the business, and that sentiment was reflected in the incredible results we were able to achieve today.”

Burgess Rawson directors Billy Holderhead and Jamie Perlinger say the lease structure offered on all 15 properties made a compelling case for investment.

“The campaign was a success before the auction even started, with 850 enquiries across the campaign,” Holderhead says.

“The properties sold for more than $10 million above their collective reserve prices, proving that there’s a great deal of urgency from investors for good quality properties, and that 7-Eleven was here to meet the market,” Perlinger adds.

“Each of the properties was offered with a renewed 12-year lease with fixed 3% rent increases, with many sites also offering development potential or space to expand. In many cases, they were bought for less than what it would cost to replace them.”