A PRIVATE investor has paid $11.2 million for the Bunnings Warehouse at Torquay in Victoria's Surf Coast, on a record yield of 6.52%, the strongest result achieved for a Bunnings transaction since 2007.

This is the second Bunnings property transaction this month following the sale of Bunnings Mentone for $42,950,000, which represented a yield of 6.75%.

Bunnings Torquay was sold via a public tender campaign, through CBRE Victorian retail investments agents Mark Wizel and Justin Dowers, in conjunction with Gross Waddell Darcy Jarman agents Andrew Waddell and Tim Darcy.

CBRE associate director Justin Dowers said the strong 6.52% yield is significantly sharper than the yields being achieved for these types of assets in 2012.

“It also eclipses the 6.75% yield achieved for Bunnings Mentone,” he pointed out.

Dowers said the result highlights significant yield compression in the past 18 months for this style of asset on the back of a low interest rate environment, improving confidence in the retail sector and the ongoing chronic lack of supply of quality Victorian retail investment properties.

CBRE’s Wizel said 12 conforming and unconditional tenders were received, predominantly from Victorian and interstate private investors. The end purchaser was a Victorian based private investor.

The 6,912 sqm warehouse is located on a 19,310 sqm corner site on the outskirts of the Torquay town centre.

“This was a very strong result for the region, and this unprecedented level of interest received underwrites the confidence the buyer market has in quality Victorian retail investments, particularly those backed by such as strong covenant.” Darcy Jarman director Tim Darcy added.

Property Review