SOLD: Invermay tools building scores $8.1m sale

Tool Kit Depot at No.80 Lindsay St, Invermay.

An Invermay building owned by Bunnings Warehouse has been sold for one of the highest prices at June’s Investment Portfolio Auctions.

Burgess Rawson from CBRE sold No.80 Lindsay St for $8.1m under the hammer. This delivered a 5.19 per cent return.

Leased to Tool Kit Depot, and built only last year, the building was revealed to be a highly prized asset among the dozens sold at the auctions held in Melbourne, Sydney and Brisbane.

Burgess Rawson partner Matthew Wright said it was purchased by a private interstate-based investor who has other holdings in Tasmania.

He said the Bunnings Ltd lease was extremely attractive to potential buyers.

“It is the first TKD that they have offered to the market, and we were happy with how it performed,” he said.

“It has set a benchmark, a strong yield for the rest of Australia.”

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Tool Kit Depot.

Tool Kit Depot.

TKD, formerly Adelaide Tools, was purchased by the Bunnings Group 2019 as a way for the Aussie giant to expand its reach into the specialised tool market for tradies.

The move meant Wesfarmers, the parent company for Bunnings, was able to cater to a wider range of customers through products not offered at traditional Bunnings Warehouse complexes.

The move wasn’t without controversy, though, with tradies expressing frustration their Bunnings cards were not useable at TKD sites.

Mr Wright confirmed the property was hotly contested by five registered bidders.

“We had in-room bidding, interstate bidding, and there was some significant local interest in the property, too,” he said.

“It is an unbelievable asset, and the sale could not have gone any better.”

Burgess Rawson partner Darren Beehag agreed, saying the TKD building attracted an “incredibly sharp yield” for a large format retail asset in Launceston.

“It is one of the strongest results we’ve seen in the area in recent times,” he said.

“The result was not surprising given the quality of the real estate and the calibre of the tenant.”

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Alongside the home of this tools business, a Devonport Petbarn and Vinnies asset fetched $2.84m at a yield of 5.87 per cent.

Bidding started for No.1-3 Finlaysons Way at $2.25m, with a flurry of bids taking it up to $2.4m before auctioneer David Scholes called “once, twice, third and final …” for the first time.

Auctioneer David Scholes at the Burgess Rawson commercial property portfolio auctions in Melbourne.

Over a dozen more bids saw it reach $2.6m, where Mr Scholes quipped: “One would have argued this is probably where we should have started!”

From here, a flurry of bids in mostly $10,000 increments pushed the number up to the final price. “Sold!”

Elders Commercial Northern Tasmania head of commercial sales, Nicholas Bond, said the property attracted excellent interest during the marketing campaign, with a number of parties travelling to Devonport to inspect the asset.

“Bidding at auction was competitive with groups from Victoria, Tasmania and overseas,” he said.

“The result at auction reflects the quality of the asset and the underlying confidence that investors have in the Devonport market.

“During national campaigns, our team on the ground spend a lot of time working with interstate buyers to help them understand the market dynamics within Tasmania and the subtle differences between regions.”

No.1-3 Finlayson Way, Devonport.

Meanwhile, there will be a number of forthcoming Tasmanian assets sure to grab investor attention in the next portfolio.

Mr Wright said a NAB Bank in the north, an industrial government-leased asset in Mornington and the La Sardina building in Elizabeth St, Hobart, are coming to market.