Buy one of the cheapest Bunnings in Australia

They’re one of Australia’s most popular commercial property investments, so Bunnings-leased properties don’t tend to come cheap.

Many Bunnings stores sell for well in excess of $10 million, with some selling for as much as $40 million, such is the demand for a prized Wesfarmers lease covenant, but a small Bunnings outlet in regional Queensland is about to buck that trend.

At Warwick, 150km south-west of Brisbane, a boutique 2075sqm Bunnings is on the market, with agents expecting it to sell for around $3 million.

The property, long held by a Brisbane family and leased for more than $172,000 per annum, is being marketed by Cushman and Wakefield’s Markus Eames and Tarla Brennan, who say good things can come in smaller packages.

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“The floor area is only 2075sqm … but you’re buying the income, aren’t you? It’s a pretty good guaranteed income isn’t it,” Eames says.

Eames admits the only catch is that Bunnings likely won’t be there forever, with the home hardware giant currently seeking development approval for a larger 7000sqm store elsewhere in the Warwick township.

The Bunnings store in Warwick sits on almost 7000sqm of land.

But he says there’s no timeline on when that might be, and the move will also create an opportunity for redevelopment.

“Bunnings in Warwick have their foot on another site to build a 7000sqm new Bunnings, but in saying that it’s still subject to DA and who knows, they might not move for five or six years,” he says.

“It’s got a great repurpose opportunity. Like your Masters (stores) all over Australia, this one has that opportunity. I don’t think it’s if, but when Bunnings move out, and there’s that chance to repurpose on such a good site,” he says.

“A lot of the retailers are still looking for larger space and they’re always on a price point, and when you put that rent of $172,000, around 7000sqm of principal land plus 2075sqm of building, the Harvey Normans and the Spotlights of the world can go in there, mid-$100,000 range, refurbish and go from there.”

The store at 26 Palmerin St sits on 6916sqm of land, spread over 10 lots and with exposure to Palmerin and  Albert streets.

The store is leased to Bunnings until at least late-2018.

The Bunnings lease on the current store runs until October next year, though Eames says he expects it to be extended for a period.

“It’s probably not your typical Bunnings buyer that sets and forgets at 5.5% (yield), it’s probably your Bunnings buyer that hopes to get that income until the end of 2018 – and I’d be very surprised if it wasn’t renewed for longer – and then that redevelopment plane, too, with the building,” he says.

“It’s a pretty good site with the zoning, too. The site value is every bit of what the yield would be. It’s one of those places that someone could buy and redevelop, but at the same time they could have Bunnings for four or five years, or it could be longer.

The property is being sold via expressions of interest, which close on April 12.