Large-format retail sparks shopping spree
Investors are lining up for large-format retailing assets that are home to bulky-good tenants set to benefit from an improving residential market.
One of the latest to test the market is a Bunnings-anchored centre in the NSW Riverina region, with an estimated value of about $30 million.
The Griffith Hometown centre is on a 6.41-hectare site with an 8688-square-metre Bunnings warehouse, and is being sold through James Wilson and Alex James-Elliott of Colliers International.
The agents said, given recent interest rate cuts, investors were more than ever seeking returns underpinned by long-term leases to national tenants.
With interest rates at a historical low of 1 per cent it is expected to boost the housing market, and that flows through to higher demand for new furniture and other bulky goods.
Mr Wilson, the national director of retail investment services, said the centre also offered potential buyers the opportunity to future-proof the asset, given the opportunity to expand the Bunnings Hardware while "also being secured by other high-profile destination retailers including Spotlight, Fantastic Furniture and Repco".
"In 2018 the large-format retail sector recorded $1.03 billion worth of investment sales across 21 assets, with around 20 per cent of these taking place in NSW," Mr Wilson said.
Mr James-Elliot, executive of retail investment services, said: "We anticipate that the offering will be well received by syndicates, unlisted funds and high-net-worth private investors, with the relative yield/return available to investors through large-format retail assets currently very appealing."
It comes after Blaxland Home Centre, in Sydney's south-west Campbelltown, was sold for $47.5 million by Tim Knapp of Knapp Property Group in conjunction with Mr Wilson, on behalf of Intergen Property, to a private investor.