Bunnings moving into ex-Masters site

The big box retailer has confirmed to The Adelaide Advertiser that it will open a store on Sir Donald Bradman Drive in the warehouse once occupied by Masters Home Improvement, at Adelaide Airport.

Work has begun on a $15 million redevelopment of the site, opposite Ikea, with the 13,000sqm store set to open mid-next year.

Adelaide Airport property executive general manager James Sangster welcomed the addition of Bunnings to the airport. He told The Advertiser:

Bunnings' presence will create more retail jobs at the airport on top of those already being created by (the airport) as part of the expansion of our main terminal.

Bunnings acting general manager - property Garry James said the new store was a "significant investment" for the hardware retailer. Masters had two locations in South Australia and two under construction when it closed all stores in December 2016 after enormous losses.

Real estate sell-off

In other developments, Bunnings has also been selling off some of its real estate holdings around Australia.

Horsham

The building that houses Bunnings Horsham has gone to auction and is expected to have a sale price of $9.25 million. The 9581sqm site has three street frontages on Horsham's Wilson Street. It is the only Bunnings in the Wimmera.

The property returns $560,766 per annum and is on a 12-year lease until 2025, with a further four five-year options until 2045.

Melbourne-based commercial real estate agency Burgess Rawson has auctioned the property. Burgess Rawson director Shaun Venables said the property's location added to its appeal. He told The Wimmera Mail-Times:

Horsham is the capital of northwestern Victoria and it's a really captive catchment endorsed by the fact that all of the major supermarkets are represented. Coles, Woolworths, Aldi and Kmart are all within 500 metres of the site.

Perth

The Charter Hall Direct Consumer Staples Fund has bought a Bunnings-anchored retail centre in Perth in an off-market deal worth $35 million.

The property at 303 Stirling Highway in Claremont has 5460sqm of space across three levels. The Bunnings store accounts for 93% - a little more than 5000sqm - of the total retail space and has a lease expiry of 2027 plus options.

The property is located about 10 kilometres south-west of Perth's CBD.

Charter Hall also announced its Long WALE REIT had made several off-market property acquisitions collectively worth $331.5 million, including a Bunnings Warehouse site in Darwin.

The deal, worth $41.3 million, was transacted on a passing yield of 5.7% with a 12-year lease to Bunnings.

Warragul

Newmark Capital has acquired a $51 million large-format retail centre in Warragul (VIC), anchored by Bunnings and Kmart. The 25,238sqm centre on a 5.7-hectare corner site is about 107 kilometres south-east of Melbourne.

It will sit within the Newmark Hardware Trust, which owns three Bunnings properties in Launceston, Lake Haven and Maroochydore.

A 6% yield is anticipated on the completed development, which Newmark purchased with development deals in place with Ballarat-based Troon Group.

Newmark Capital joint managing director, Chris Langford said since restructuring and opening the Hardware Trust to new investments, $20 million of fresh capital had been raised.

The Warragul centre includes nine tenancies and is 85% pre-leased, including leases to Bunnings and Kmart. The site settled in July and construction has commenced, with completion expected next June.

Mr Langford said the retail centre was in an area of strong population growth. He told the Australian Financial Review:

[Nearby Pakenham] is going like blazes. It has the highest population growth in the state at 3.5% per year.

Clyde North

Bunnings has placed its recently opened large-format Clyde North warehouse in Melbourne's south-east up for sale.

The 16,634sqm retail warehouse and 372-vehicle car park will be sold with a new 12-year lease in place, bringing in net income of about $1.9 million a year. Based on a yield of around 5% struck for similar Bunnings assets, it could be worth about $38 million.

The Clyde North Bunnings is on Berwick-Cranbourne Road and fronts developer MAB Corp's Element Park, a 30-hectare master-planned business and retail park.

Ballarat

Ballarat's original Bunnings Trade Centre in Mitchell Park (VIC) has been auctioned. Bunnings Trade was a tenant at the warehouse at 19 Waringa Drive until November but moved out before that after the opening of the new Bunnings store in Delacombe.

The 6738sqm property includes surplus land that could be developed or sold. Graeme Watson from Burgess Rawson commercial real estate said the location capitalises on an upgraded road network, which services the western part of Victorian and connects to Melbourne.

Sourced from The Adelaide Advertiser, Wimmera Mail-Times, Australian Financial Review and Ballarat Courier