MPG portfolio hits $700m with Rockhampton Bunnings deal

Previously a Masters home-improvement store, the centre was converted to a Bunnings in 2017 and then sold to Charter Hall for $37.5 million.

MPG, which has acquired 14 properties in the past 18 months, many in regional hubs, bought the Bunnings on behalf of wholesale investors for a new single asset trust.

It is 94 per cent leased with an 8.5-year weighted average lease expiry. MPG expects to pay a 6.5 per cent distribution yield for the 2020 financial year.

MPG chairman Trevor Gorman said the MPG BW Rockhampton Trust closed two times oversubscribed. MPG will also launch a Regional Cities Property Trust this year that will soon hold $100 million of investments.

“With the Australian sharemarket at record highs and with RBA cash rates at historical lows, the income characteristics of property with cash returns in the vicinity of 6 to 8 per cent are looking very attractive to investors compared to most cash and fixed interest investments,” Mr Gorman wrote in a recent letter to MPG investors.

Peter Tyson and Jon Tyson from Savills negotiated the sale of the Rockhampton Bunnings.

MPG, which evolved out of property developer the McMullin Group, (established by the late Spotless founder Ian McMullin) has embraced the idea of “Big Australia” after launching a $66.4 million regional property fund in 2018. The fund owns commercial property in regional hubs such as Newcastle, Bendigo, Armidale and Maryborough.

The MPG Regional Cities Property Trust has a focus on government and social infrastructure properties located in fast-growing regional cities with a targeted distribution of 7.05 per cent by June 2020.

It comprises nine properties including the Environmental Protection Authority building in Traralgon, the National Disability and Insurance Scheme building in Toowoomba and five Centrelink branches in Echuca, Maryborough, Hervey Bay and Morwell.