Bunnings-anchored retail centre in Griffith expected to fetch $30 million
A large-format retail centre in the NSW Riverina town of Griffith, which is currently tenanted to several national brands, has hit the market with price expectations of around $30 million.
The 6.41-hectare Griffith Hometown Centre, located on a prominent site at the corner of Kidman Way and Watkins Avenue, is anchored by an 8688-square-metre Bunnings Warehouse and features a weighted average lease expiry of 6.35 years.
Other tenants operating at the site include Spotlight, Fantastic Furniture, and Repco, with Colliers International reporting that 83 per cent of the centre’s income is derived from national tenants.
James Wilson, national director, retail investment services at Colliers International, said the Bunnings store was likely to be the drawcard for prospective buyers, with the store’s lease term including a highly sought-after net lease provision (where the tenant is responsible for all outgoings).
“Large-format retail centres that are anchored by a Bunnings are extremely attractive; as one of Australia’s most successful retailers, Bunnings Warehouse secures a significant proportion of the income and area of the centre,” Mr Wilson said.
Mr Wilson said Bunnings had commenced the current lease, which has an initial 10-year term with eight options at six years each, in September 2018.
Given the $30 million price point, the listing is being pitched as a likely fund or syndicate acquisition.
“We anticipate that the offering will be well received by syndicators, unlisted funds and high net worth private investors, with the relative yield/return available to investors through large-format retail assets currently very appealing,” explained Alex James-Elliott, executive, retail investment services at Colliers International.
The sale includes a vacant land parcel adjacent to the Bunnings Warehouse building which agents say could be used to expand the current Bunnings operations.
“Due to the size, shape and proximity to the Bunnings Warehouse tenancy, the vacant land parcel provides an excellent opportunity, subject to council approval, for Bunnings to expand its operations in the future,” Mr Wilson said.
The listing follows a string of recent Bunnings Warehouse sales.
Colliers International sold another Bunnings-anchored large-format retail centre in Port Macquarie in 2018 for $44.65 million while a Melbourne-based syndicate recently added a newly built Bunnings Warehouse to its retail property portfolio, paying $21.3 million for the Victor Harbor asset in a deal brokered by Burgess Rawson.
Colliers International’s James Wilson, in conjunction with Tim Knapp of Knapp Property Group, recently sold the Blaxland Home Centre in Campbelltown, in Sydney’s south-west, for $47.5 million.
Mr James-Elliott said interest rate cuts were helping drive demand for assets with long-term leases in place.
“Given the recent interest rates cuts, investors are now more than ever seeking returns underpinned by long-term leases to national tenants.”
Griffith Hometown Centre is for sale by expressions of interest closing August 8.
