7-Eleven’s Final Sale and Leaseback Portfolio Auction
“Are there going to be more?”
It’s a question the team at Burgess Rawson has heard with almost relentless regularity over the past three months.
From the moment the last of 15 properties leased to Australia’s largest convenience retailer 7-Eleven were snapped up at a special auction event in October, investors have been demanding another shot at securing one.
So popular were the properties that all 15 were sold in under three and a half hours, marking them as arguably the most talked about commercial property portfolio of 2019, but also exposing a significant vein of unfulfilled demand.
“A lot of the successful buyers, along with those who missed out, have been chasing us and asking, ‘Will there be more? Because we want to buy another one or two’,” Burgess Rawson director Mr Billy Holderhead said.
“Investors who bought last time still have capacity, and those who missed out are still very much in the market.”
So it is with tremendous excitement that Burgess Rawson can now reveal that 7-Eleven will release the last remaining 18 properties to the market in a second special auction event on Tuesday, February 25.
The properties, which will be leased back to 7-Eleven on brand new 12-year lease terms, feature some of their most prominent and well-located sites across New South Wales, Victoria, Queensland and Canberra. And, just like the first auction, they will be affordable and priced to sell, relative to other fuel and convenience sites sold in the last four years.
Commercial property investors are shifting their focus to the market leaders in each sector. In the fuel sector, 7-Eleven freeholds are at the top of everyone’s wish-list because they are the best convenience retailers in the market.
“If you watch the customer activity at their fuel sites, the number of customers shopping at a 7-Eleven and not buying fuel is completely unique to the brand. And they are constantly evolving by offering new products and services, thereby increasing the foot-fall and visitation to their sites within their local markets,” Burgess Rawson director Mr Jamie Perlinger said.
“7-Eleven is expanding by about 30 stores per year and would like to accelerate that growth through the sale of existing assets. They have ambitious growth goals and holding these properties is not going to help them achieve their ambitions.”
But here’s the kicker.
While the last auction was 7-Eleven’s first offering of a portfolio of its properties, Mr Perlinger assures investors that the February auction will be its last.
“This is definitely the final opportunity to secure one of the properties under these conditions,” he said.
“There won’t be another auction.”
The properties will be sold at a combined auction event, starting in Sydney before switching to Melbourne, and live streamed into all of the agency’s offices and bidding auditoriums across Australia.
Headlining the offering is the 7-Eleven at Wahroonga on Sydney’s upper north shore. Located on the six-lane Pacific Highway and positioned at the gateway to one of Sydney’s most tightly-held retail strips, the property is close to the train station and prestigious local schools.
“60,000 vehicles pass it every day and the rent is just under $117,000, meaning it’s going to be exceptionally attractive as an investment, considering the quality of the location and the underlying value of the land. It’s an unbelievable property,” Burgess Rawson director Mr Simon Staddon said.
In Victoria, a well-known 7-Eleven site on Bell Street, Pascoe Vale South is certain to prove popular. The property is the last fuel site before the Tullamarine Freeway, featuring a strategic 1866sqm site and leased for $215,000 per annum.
Another 7-Eleven integrated with Corio Village Shopping Centre in the booming Geelong region is expected to be one of the most attractive Victorian asset for investors, with an annual rent just over $160,000. The 7-Eleven occupies a prime 2360sqm landholding adjoining Corio Village, which was recently sold for $101 million.
Two high profile opportunities exist in the ACT. The 7-Eleven located in Mawson is set for a big future, with the site earmarked for six-level development potential in the long-term, while another at Erindale comes amid heated investor interest in the area, evidenced by the recent $39 million sale of the Erindale Shopping Centre.
Two properties will be offered in Queensland, with one just 200 metres from the iconic Dreamworld theme park on the Gold Coast. The extensive 8594sqm property is positioned to benefit from a proposed adjoining $500 million resort and residential development, as well as the theme park’s million-plus visitors each year.
Other 7-Eleven-leased assets are located at Nambour in Queensland; Giralang, Melba and Spence in Canberra; two sites in Newcastle, two in the Blacktown region and one in Penrith in NSW; and Upwey, Wantirna and a second site at Pascoe Vale South in Victoria.
Mr Holderhead said this was a unique opportunity to gain a foothold in the convenience retail market at an affordable price point.
Burgess Rawson’s 7-Eleven Portfolio Auction will be held on Tuesday, February 25, commencing at 50 Margaret Street (Auction Works) in Sydney. The event will begin at 10.30am, with buyers able to bid live from the Melbourne auction room. The auction continues live from Crown Casino’s Garden Room in Melbourne from around 1.30pm.