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BUNNINGS Warehouse at Yarrawonga has been sold to Chinese investors for $11.5 million at a company record breaking yield of 5 per cent.
The transaction also marks the first ever sale of a Bunnings Warehouse to mainland China, which is expected to pave the way for further Chinese investments in the Victorian retail market.
CBRE's Victorian Retail Investments team of Justin Dowers, Mark Wizel, Kevin Tong and Joseph Du Rieu marketed the sale through a hotly contested process which attracted 10 purchase offers from more than 110 interested parties.
Wizel says the sale follows a year of growing engagement with Chinese investors, and is the first major example of a group making an aggressive play for an investment property with a long-term lease.
"In the past 18 months we have seen more offshore investor enquiries on retail investment properties than ever before, with Asian parties accounting for an average of 36 per cent of the enquires on CBRE's retail campaigns," says Wizel.
"It's also noteworthy that offshore investors are enquiring on properties in regional locations and now have the confidence to buy in these areas."
Dowers also expects that offshore interest will peak throughout regional areas, particularly as yield differentials between metropolitan and regional investments reach their lowest point in the current cycle.
"With the current environment characterized by a lack of premium retail investment stock, we are seeing an increase in demand for assets located in regional towns which are experiencing population growth and benefiting from government investment," says Dowers.
According to Dowers, the continued growth and strong performance of the Bunnings Warehouse business continues to be a strong selling point.
"We are continually hearing from buyers that they just want to own a Bunnings store," he says.
CBRE's recent Retail Market view research report found that foreign buyers boosted retail property transactionsby 20 per cent to hit a record high in 2015.
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