A Bunnings Warehouse Goes Offshore In First-Ever Transaction

A successful transaction has led to the first ever Bunnings Warehouse to go to an offshore investor from Shen Zhen, China.

CBRE’s Victorian Retail Investments team of Justin Dowers, Mark Wizel, Kevin Tong and Joseph Du Rieu led the sale of the off-the-plan Bunnings Warehouse on the corner of Murray Valley Highway and Frank Drive, Yarrawonga, at a yield of five per cent.

The Shen Zhen-based investor won the warehouse after an Expressions of Interest campaign brought in 10 offers to purchase the property, following engagement from over 110 interested parties.

CBRE consider the $11,590,000 sale to be a landmark transaction as the first ever Bunnings Warehouse to be acquired by a mainland Chinese investor, in a deal likely to pave the way for further investment in the Victorian retail investment market from Chinese parties.

“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% of the enquiries on CBRE’s retail campaigns,” CBRE Victorian Retail Investments team member Mr Wizel said.

“It’s also noteworthy that offshore investors are enquiring on properties in regional locations and now have the confidence to buy in these areas.”

According to a recent Retail Market view research report, foreign buyers helped boost retail property transactions in Australia to a record level in 2015 - with the total value of retail transactions being 20% higher than in 2014.

Foreign buyers contributed to 27% of the total sales – compared to the historic average of 12% over the past 10 years.

“With the current environment characterised 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,” Mr Dowers said.

CBRE’s Victorian Retail Investments team believe the with the current Australian 10-year bond rate below 1.99% for the first time in Australian history, continued demand can be expected from both local and offshore assets.