Commercial buyers to flex muscle at latest Portfolio Auctions

Thursday 31 March 2016

Written by Adrian Ballantyne, Real Commercial

A gym synonymous with Hollywood royalty and a supermarket in a prime Melbourne growth hub will be among the big ticket items at next week’s Burgess Rawson Portfolio Auctions.

A Canberra fitness centre leased to the iconic Gold’s Gym brand, renowned for being Arnold Schwarzenegger’s gym of choice in California in the 1970s, will be watched with interest when it goes on the block along with 17 other properties in Sydney on Tuesday, April 5.

The gym, on Gozzard St in Gungahlin, was built in 2013 and is leased to Gold’s until 2023, with a further 10-year option.

The site features 14 on-site parking spaces, while the facility is spread over three floors and draws annual rent of more than $314,000.

Also up for sale are a string of retail outlets leased to fast food giants, including a McDonald’s at Childers in Queensland, a Crust Pizza store and neighbouring pharmacy at Annandale in New South Wales and a Hungry Jacks at Griffith.

Childcare centres will also feature prominently, after reports of record yields for regional facilities and suggestions childcare is currently the most sought-after asset class.

Centres in Cabramatta, Prairiewood, Chatswood and Freshwater will all be up for sale as owners attempt to capitalise on the current demand.

The following day in Melbourne an IGA plus Liquor supermarket alongside a Mirvac residential development in Wantirna South will be keenly contested among investors.

The IGA supermarket in Wantirna South is expected to sell for more than $4 million.

Burgess Rawson senior executive Ben Appel says the supermarket is expected to be the trophy buy across the two days of auctions, with established supermarket buyers already eyeing the property.

“We have received enquiry from most of the well known supermarket investors and retail players in Melbourne,” Appel says.

You effectively have the biggest IGA operator as your tenant, ensuring that this lease covenant can stand up next to any Coles or Woolworths investment

The 900sqm supermarket sits within the Harcrest Village Shopping Centre and is leased to supermarket distribution giant Metcash for 15 years, with options through to 2042. It is expected to sell in the mid-$4 million range.

The shopping centre has 96 car parks, five specialty shops and a cafe, and sits at the gateway to the Mirvac-owned Harcrest residential development, which will be completed in 2017 and bring 900 new homes to the area.

“Harcrest is one of the best examples of a new, modern, master planned housing development and this supermarket not only sits at the entrance to the new estate but services the whole City of Knox, one of the most populous municipalities in Melbourne with a population of around 160,000,” Appel says.

“IGA now have over 1400 stores around Australia and with Metcash operating and guaranteeing the lease and business at Wantirna South you effectively have the biggest IGA operator as your tenant, ensuring that this lease covenant can stand up next to any Coles or Woolworths investment presently on the market.”

Also up for grabs on April 6 in Melbourne are a Woolworths Caltex petrol station in Clayton, a Liberty/Shell petrol station in Lancefield, three childcare centres in Langwarrin, Glenroy and South Australia, and a Queensland supermarket leased to Dutch chain SPAR.