Berri offers first Bunnings of 2017

A new Bunnings Warehouse in Berri is the first to be listed in 2017.

Investors who’ve waited patiently for another Bunnings Warehouse to hit the market need not wait any longer, with a South Australian asset leased to the hardware giant the first to be listed in 2017.

The almost new Bunnings outlet at Berri, in the Riverland region, will be keenly sought after, with no properties offering blue-chip Bunnings tenancies being offered to the market since late last year.

The price of the latest property could be upwards of $10 million, with a similarly designed Bunnings in Swan Hill selling for $10.95 million on a 5.11% yield in late 2015.

The demand for Bunnings-leased properties has only intensified since then, with a Chinese buyer paying $11.59 million for a newly-built store in Yarrawonga in regional Victoria, on a yield of 4.94%, and other Bunnings-leased outlets selling on yields in the low-5% range.

Adelaide-based developer Pat & Co. Pty Ltd – headed by Tony Moro – is selling the Berri property, with CBRE’s Joseph Du Rieu, Justin Dowers, Alistair Laycock and Jordan Kies appointed to market it.

The continued lack of retail investment opportunities such as this is also driving investors to compete for assets in regional locations

Moro says Bunnings’ move to the Berri site was a strong vote of confidence for the wider precinct currently in the pipeline for the surrounding land on the Sturt Highway.

“With one of the country’s most recognised retailers taking a long-term lease on the first stage of the development, we can take great confidence that other retailers and business owners will be drawn to the development of Riverland Complex Bulky Goods precinct stage two and three over the coming years,” Moro says.

Du Rieu says demand for Bunnings outlets shows no signs of easing.

“Bunnings Warehouse investments are recognised as the most secure and sought after investment covenant in the retail investment property market – this emanates from Bunnings being one of the most profitable business under Wesfarmers’ control,” he says.

Dowers adds: “Bunnings warehouse investment properties have been a highly sought after investment vehicle over the past two or so years – a factor that is helping compress yields to as low as 5% in some instances,” he says.

“The continued lack of retail investment opportunities such as this is also driving investors to compete for assets in regional locations.”

“Furthermore, the consistent performance and revenue growth of Bunnings has been a key attraction for private and institutional investors, along with the depreciation tax benefits associated with the new assets.”