Investors line up Target Hamilton store

Chances to buy a Wesfarmers-leased property for less than $4 million are as rare as they come in the commercial market.

But that opportunity has presented at Hamilton in regional Victoria, where a major Target Country store is set to go under the hammer next month.

The property at 119-123 Gray St in the heart of Hamilton will be auctioned at Burgess Rawson’s next Investment Portfolio Auction at Crown Casino on Wednesday, August 7, with price expectations of less than $4 million.

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That price would represent a very attractive high yield for a significant regional investment, Burgess Rawson director Billy Holderhead says.

Target Country in Hamilton, Victoria.

“In a town like Hamilton, it’s difficult to find anything leased to Wesfarmers under $4 million with a high yield,” Holderhead says.

“You’d struggle to replace the store for the sort of money we’re talking. It’s quite a lot of property for the money in a very strong regional town.”

The modern 2081sqm store is leased to Wesfarmers until September 2022, with a further 10-year option, while depreciation benefits mean up to 42% of the $371,103 in annual rent could potentially be tax-free.

The carpark entrance at Target in Hamilton.

The store also has 17 basement car spaces and rights to a further 55 spaces, as well as more than 20m of street frontage.

Holderhead says Target’s retail outlook is “in the midst of a major turnaround”, with improving financials driven by revamped product lines and the strategic repositioning of the brand.

Burgess Rawson has sold 12 of the last 13 freestanding Target stores Australia-wide, including recent sales at Maryborough and Cobram.

The property is surrounded by major tenants and retailers.

The auction comes after the December sale of Hamilton’s Coles supermarket, which traded for around $23 million on a yield below 6%.

“That was a very definitive vote of confidence in the town,” Holderhead says.

“It’s a booming area and investors are very actively trying to get in here.”

Burgess Rawson’s 130th Investment Portfolio Auction will be held in Crown Casino’s River Room on Wednesday, August 7 at 11am.