In yet another sign of the strengthening fuel and convenience-based retail investments, a retail convenience service centre has sold in Sydney for $23 million on a 4.93% yield, one of the highest values ever paid for a service centre in NSW.
Occupying a 7,731sqm site at 2072-2074 Camden Valley Way, Edmondson Park the site provides future development potential including a strata subdivision (STCA) to capitalise on the region’s population growth.
The service centre returns in excess of $1.135 million in net income across five leases and is anchored by Ampol (Formerly Caltex) on a 10-year lease. Plus Fitness, Frangos Charcoal Chicken, Philliez and a SANGAM Indian supermarket round out the tenant offering with a WALE of more than 8 years.
The expressions of interest campaign was managed by Cushman & Wakefield’s Yosh Mendis, Geoff Sinclair & Michael Collins, in conjunction with JLL’s Dylan McEvoy and Gordon McFadyen.
Edmondson Park and the surrounding suburbs continue to benefit from significant public and private investment, with Landcom, the NSW Government’s land and property development organisation, partnering with a range of developers. Frasers Property is currently developing a 24ha site which includes the town centre and affordable housing, while Super Star Holdings Group has submitted plans for eight residential buildings.
Cushman & Wakefield’s Associate Director, National Investment Sales, Yosh Mendis said: “We received an influx of investor interest from private investors, syndicates and institutional investors nationally looking for long term secure income profiles with the property being sold to a Qld based private family.”
“The convenience retail market has been exceptionally active over the past 12 months, with a string of deals transacting recently. Cushman & Wakefield has now sold over $300 million in fast food, fuel and convenience-based retail investments in the past 12 months, as yields continue to test new lows.”
Cushman & Wakefield’s Associate Director, National Investment Sales, Geoff Sinclair, said: “Secure alternative investments continue to be front of mind for investors, and fixed 3% and 5% annual rental increases and income underpinned by national tenants, it’s no surprise the centre was hotly contested.”
Mr McEvoy said, “Roadside retail assets with their national tenants who have proved their sustainable business models during the pandemic, landlord friendly lease structures, secure guarantees and typically fixed income growth provide investors with significant comfort and confidence. These assets are often located in high profile/exposure positions which lend the assets to long term redevelopment potential.”
“We are continuing to see strong market activity and competition for convenience retail assets, as investors demonstrate their confidence in assets of a typically secure nature. The investor profile is broad, with high-net-worth private families, family trusts, investment managers, syndicators and property funds all actively investing in this commercial property segment,” said Mr McEvoy.
