Strong demand for leased retail assets has underpinned the sale of the Auburn Super Amart store in Sydney’s west for $28.25 million – reflecting an uplift of $9 million from when it last changed hands two years ago.
CBRE’s Justin Dowers, Nick Willis and Peter Vines managed the sale campaign for the 311 Parramatta Road property, which is leased on a 10-year term to Australia’s second largest furniture retailer.
Located on a 25,100sqm site, the freestanding building comprises an 8,451sqm showroom/warehouse facility, which currently houses one of Super Amart’s largest Sydney outlets.
The vendor, a wholesale syndicate managed by Elanor Investors Group, purchased the asset in 2014 for $19.25 million – with the on-sale reflecting an uplift of approximately $9 million in two years.
The property benefits from a central position within Auburn, one of Western Sydney’s major suburban centres, located approximately 20km west of the Sydney CBD and 4km east of the Parramatta CBD.
CBRE’s Justin Dowers said the property’s position and tenancy profile were fundamental in securing a strong result.
“The opportunity to acquire a significant, inner Sydney metropolitan retail investment, underpinned by a large landholding in one of the city’s strongest growth corridors, attracted interest from a range of local, national and offshore investors,” Mr Dowers said.
“The limited supply of quality retail assets coming to the market, coupled with increased investor demand, is driving continued yield compression in the sector. This is particularly evident with large format retail assets due to their typically low maintenance and significant landholding size that offer future development potential.”
He added; “There is a significant level of demand for single tenant investments, as investors continue to look at diversifying towards less management intensive properties.”
CBRE’s Nick Willis commented on the transaction; “As the hardware sector continues to evolve and expand, partly fueled by the recent exit of the Masters Hardware business, we are seeing more opportunities from repurposed hardware properties.”
The CBRE Retail Investments team has marketed a number of former hardware buildings, including the vacant Masters in Nowra and currently, the Sunbury Showrooms in Victoria, which was previously a Bunnings Warehouse.
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.