VICTORIA’S most viewed commercial property investment, a Dan Murphy’s liquor outlet in Chirnside Park, has sold on sub 4% yield – highlighting investors’ thirst for defensive assets.
Agents Dawkins Occhiuto’s Walter Occhiuto, Andrew Dawkins and Chris Jones sold the property at 2 Fletcher Rd in Chirnside Park following an expressions of interest campaign.
The sale price was in excess of $12 million.
Occhiuto said the property was highly sought after and the campaign was extremely competitive, which reflects the strong appetite, rather in this case, thirst for the liquor store.
He added that the property was the most viewed listing on Realcommercial during the campaign. The listing was also one of the most read stories on Australian Property Journal.
“The campaign attracted predominantly high-net-worth (HNW) investors currently searching for home to invest their capital over the long-term.
“There is an obvious flight to quality and now more than ever, assets with strong covenants and long-term lease to a national tenant are critical,”
“If anything the COVID-19 pandemic and lockdown has seen sales at this liquor store go through the roof!” he continued.
Occhituo said there is a “sweet spot” of HNW investors in the market, who have between $10-$20 million.
“A while ago we used to talk about investors who had $500k-$2 million, they later moved up to the $5-$10 million bracket and now $10-20 million. But there is a real shortage of good quality assets that meets their requirements.” Occhiuto said.
“It is extraordinary what is happening right now. Investors with secure investments delivering long term passive income are holding on, they are not active sellers. Therefore, when a recession proof asset such as this comes on the market coupled with record low interest rates, it is highly sought after,”
The 5,917 sqm property is improved by a Dan Muprhy’s liquor store with a gross lettable area of 1,387 sqm. It was sold with a 15-year lease from December 2017 with 12.5 years remaining, plus options. The current annual base rental is $493,436 plus GST, and the tenant also pays turnover rent.
The property forms part of the 21 hectare East Ridge Estate. Close by are a 3.9 hectare site slated for retail use, and which had previously been set for Kaufland before the German hypermarket giant abruptly exited the Australian market, and a 9.3 hectare development block that will be used for residential and a retirement village.