Tasmanian Bunnings sold for whopping $21m

The Bunnings Warehouse at Burnie in Tasmania.
The Bunnings Warehouse at Burnie in Tasmania.

Charter Hall Group has snapped up a Bunnings Warehouse retail property in Burnie, on the north coast of Tasmania, with the $21 million asset to seed a new fund.

The property, bought on an initial yield of 6.1%, will be held on Charter Hall’s balance sheet until next month’s launch of the Charter Hall Direct Diversified Consumer Staples Fund.

The property has a 12-year lease to Bunnings with strong annual fixed increases of 3% per annum.

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The 3.04ha site, improved with a 12,254sqm Bunnings Warehouse, fits with the group’s model of owning well-located assets, leased to tenants on long-term leases with secure and growing income.

Charter Hall’s chief investment officer Sean McMahon says the overall Charter Hall platform has more than $1.1 billion invested in 35 Bunnings Warehouse assets.

“The acquisition maintains the existing high quality Charter Hall portfolio metrics and increases exposure to high quality retail assets with strong tenant covenant customers,” he says.

The new fund will offer investors with exposure to a portfolio of Australian real estate assets leased to companies that derive their revenue from the sale of consumer staples.

Burgess Rawson handled the property sale and director Darren Beehag says that Bunnings-leased investments remain highly sought-after by the market, mainly due to the support of the Wesfarmers covenant and large landholdings around Bunnings sites.

This article originally appeared on www.theaustralian.com.au/property.