Private investors and a Sydney-based fund manager have snapped up the stores after a year-long sales process. The latter buying the portfolio of five retail properties for $63 million spread across Victoria, NSW and Queensland.
Savills transacted the sale of the retail properties located across four states, for a combined $92 million, representing the largest group transaction of its kind in the Australian market this year.
The properties are located in Victoria (Thomastown, Geelong, Bendigo and Ballarat), New South Wales (Caringbah and Ballina), Queensland (Ipswich and Cairns) and Western Australia (O’Connor), and all are leased long-term to The Good Guys, a wholly owned subsidiary of ASX-listed JB HiFi.
The sale prices ranged from $5.2 million for the Bendigo property, up to almost $30 million for the Caringbah property. Purchase yields range from around 6.25 per cent for the capital city properties up to almost 8.00 per cent for regional properties – compelling returns for a yield starved market, according to Savills.
Savills said the sale campaign for the portfolio attracted enormous interest from local and off-shore investors ranging from private investors for single assets, to major corporate investment groups wishing to purchase multiple assets.
Savills directors Clinton Baxter, Nick Peden and Steven Lerche said the sale had been one of the most anticipated divestment of Australian retail stock of the last 12 months.
“Of the retail properties that have come to the market in recent times, none have offered such a combination of geographical diversity, with exceptional underlying land value and a blue-chip tenancy profile,” Baxter said.
“We expected strong interest from private investors seeking individual properties, but were particularly surprised by the numerous portfolio buyers seeking multiple properties across several states,” he added.
Peden said the wide price range of the assets, exceptional main road locations in key commercial precincts, attractive rental returns, together with blue-chip tenancy profiles appealed to a wide range of investors ranging from SMSFs, private investors, syndicators and property funds, whether based locally or off-shore.
The properties were all owned by the Muir family. Savills will be selling several additional properties also leased to The Good Guys in coming weeks, to complete the divestment.
“Of the original portfolio of properties we have been handling for the Muir family, it was crucial to the process that we finalised the single portfolio transaction before allowing individual properties to be sold,” said Baxter. “Now that has occurred, we are busy transacting the individual properties, with the opportunity offering exceptional value for investors at attractive yields.”
The Good Guys was founded in Melbourne’s northern suburbs in 1952, and remained a family owned business until late 2016 when the company was purchased by JB Hi-Fi Limited for $870 million. The business has grown to be one of Australia’s leading retailers in the sale of white goods and electronics, with an approximate annual revenue of $2.1 billion.
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