The market "litmus test": Stonebridge's July portfolio auction

KFC Bomaderry - 166 Cambewarra Road, Bomaderry NSW 2541

"Each of the properties [offers] attractive annual rent increase structures, providing a security blanket against inflation in the current economic environment."

As a bevy of portfolio auctions grace the commercial property market over the coming weeks, few are as dynamic and as consequential as Stonebridge’s inaugural National Portfolio Auction, taking place at Sofitel Sydney Wentworth on the 5th of July. With a diverse range of high-quality assets on offer, this auction will serve as a good litmus test for a market currently experiencing some volatility. 

Anchoring the auction is an enviable, premium freestanding investment opportunity; a KFC outlet situated in the heart of regional New South Wales’ Bomaderry. Stonebridge are familiar with the area, having recently initiated the marketing campaign for the vicinal Woolworths Bomaderry, and are now pleased to present this neighbouring property to prospective buyers. 

Sitting on a 2,801 sqm site in the midst of Bomaderry’s retail core, this ‘pad site’ offering is particularly intriguing due to its secure lease; 16 years, with options that extend to 2047. With fixed 3% annual rent increases included, this fast-food outlet is perfect for the kind of investor who would prefer to take a hands-off approach to ownership.  

KFC Bomaderry - 166 Cambewarra Road, Bomaderry NSW 2541

“Demand for blue chip freestanding investments within resilient and ‘essential’ industries appears to be holding up, as investors seek passive income security and growth,” stated Stonebridge Partner, Tom Moreland. “[The] 16 assets are underpinned by long term leases... with each of the properties offering attractive annual rent increase structures, providing a security blanket against inflation in the current economic environment.” 

A popular sector at recent auctions has been the childcare industry, which will be well-represented on July 5th. Stonebridge are set to present four childcare centres, all of which enjoy excellent location and amenity. Of particular note is the Kids ELC Springwood facility, which lies on a massive 4,077 sqm site that provides 24 car parks and possesses its own swimming pool. With a 12-year net lease to 2034 and additional options that extend to 2054, this landholding has major long-term upside.  

Kids ELC Springwood - 198-200 Springwood Road, Springwood QLD 4127

“We continue to witness significant demand from high-net-worth individuals sitting on large cash reserves,” added Stonebridge Partner, Michael Collins. “These investors are taking a long-term view, as assets they acquire often become intergenerational in nature” 

“When quality property is put to the market, there remains strong appetite amongst those looking to acquire trophy commercial property, generating secure long term cash flows from the nation’s strongest performing tenant groups and sectors.”

The portfolio contains no shortage of major, well-regarded brands. A United Petroleum and abutting Pie Face, located in the Central Tablelands city of Orange, are being sold with a landlord favourable net lease structure; a specialist, purpose-built Bridgestone tyre and service centre in the Brisbane-adjacent town of Pinkenba is listed for sale; and a conjoined Pizza Hut and Dude & Duke dining building over a 2,010 sqm site in the heart of Deception Bay, 37km north of Brisbane, is an extremely exciting prospect for investors. These respected franchises have the capital backing necessary to commit to substantial leases, giving peace of mind for interested parties. 

United Orange - 174 Woodward Street, Orange NSW 2800

With exposure to a variety of sectors, Stonebridge’s portfolio will likely serve as an indicator of where market sentiment is trending in the wake of the RBA raising the cash rate. With assets of such value up for sale, Stonebridge seems poised for a successful outing at the Sofitel Sydney Wentworth.  

The Stonebridge National July Portfolio contains 9 freeholds that are to be sold on July 5th via auction, as well as an additional 7 sites that are available for sale via Expressions of Interest campaigns that conclude on Thursday, 7th of July.