Buy a Dan Murphy’s on the cheap

Friday 10 June 2016

Written by Adrian Ballantyne, Real Commercial

A slew of blue-chip supermarket investments and a Dan Murphy’s outlet being touted as one of the most affordable to hit the market will headline the latest round of Burgess Rawson Portfolio Auctions.

A Woolworths supermarket and accompanying BWS liquor outlet in Kyabram in northern Victoria will headline two days of auctions in Sydney and Melbourne later this month, while Coles-tenanted supermarkets in Narromine and Wellington in New South Wales will be among 36 other properties on the block.

But the heaviest interest could be for a Dan Murphy’s liquor store in Forest Hill in Melbourne’s eastern suburbs, with its expected sub-$6 million price tag well below what investors typically pay for one of the liquor giant’s outlets.

Burgess Rawson agents say the Forest Hill store’s smaller 1068sqm footprint means a more accessible price point for investors.

“With a net income of $295,535 per annum, compared to a more usual income in excess of $500,000 for this type of asset, an investment of this status will be particularly attractive,” the agents say.

The store has 300 car spaces in an accompanying car park, and is leased to parent company Woolworths for 15 years, with options to 2037.

The trio of supermarkets will also be keenly contested at auction, with the lure of a Woolworths lease until 2034 to drive heated competition for the Kyabram offering, which is spread over more than 3300sqm and was rebuilt and extended in 2014.

“The supermarket is already a proven performer, having undergone extensive upgrades which will see it service this growing region for generations to come, as evidenced by Woolworths’ recent long-term commitment to this site,” Burgess Rawson director Jamie Perlinger says.

“These outstanding supermarket investments provide an opportunity to acquire what has long been considered the most desirable asset class in Australia. In this instance we have three supermarkets for sale over two auction events held in Melbourne and Sydney.”

Among the other properties for sale are two Shell Coles Express service stations in New South Wales and Victoria, a Bunnings Warehouse at Osborne Park in Western Australia, a childcare centre and a Pizza Hut on the outskirts of Geelong, in regional Victoria.

The Burgess Rawson Investment Portfolio Auctions will be held in Sydney on June 28 and Melbourne on June 29.