Service stations and an Officeworks in hot demand in $86m auction
Investors are keen to fill up on service stations and benefit from a working-from-home boost at Officeworks in an $86 million portfolio auction, amid continued strong demand for essential services properties.
Commercial real estate firm Cushman & Wakefield has received thousands of enquiries ahead of its auction of 17 alternative investment assets on Friday in Sydney.
Cushman & Wakefield head of investment sales Michael Collins said it is set to be the largest of any portfolio auction in recent months.
“The interest in our auction in Sydney has reached fever pitch, with the market for alternative investments remaining exceptionally strong following the uplift in buyer sentiment and demand witnessed in the last few months of 2020,” Mr Collins said.
“Enquiry levels for this portfolio are among the highest we have seen, with thousands of enquiries and hundreds of contracts issued across the asset base.
“As investors increasingly look to park capital in defensive, resilient assets with a higher yield, we expect to see all properties hotly contested when they go under the hammer on Friday.”
The portfolio comprises 10 service stations as well as childcare and retail properties located in metropolitan and regional areas in New South Wales, Queensland and Western Australia.
A Caltex Woolworths fuel outlet in the northern Sydney suburb of Brookvale is expected to be the most sought-after of the service stations on offer.
The Brookvale station has a net annual income of $255,000 on a 15-year net lease to EG Group to 2036 and options to 2066.
Cushman & Wakefield agents said a Caltex Woolworths service station in Newport, in Sydney’s northern beaches, is also attracting the attention of investors. It returns a net income of $270,000 per annum, also on a new 15-year lease and options to 2066.
Friday’s auction features four childcare centres in Queensland and NSW, including one with a new 12-year lease in the Brisbane suburb of Taigum.
The Cushman & Wakefield agents also expect an Officeworks located on one of Queensland’s busiest roads in Brisbane’s Aspley to be hotly contested.
Officeworks has occupied the purpose-built site for almost 17 years. Officeworks remains on a five-year lease to 2024 with options to 2029, returning $468,250 per annum.
Officeworks has experienced strong sales growth driven by increased demand for technology and home office products as people work and study at home.