Fawkner offers prime asset to yield hungry market

– BP Westernport Service Centre returning $1.048m pa –

Melbourne based property funds manager Fawkner Property has put its BP Westernport Service Centre in Cranbourne West to the market as demand intensifies for assets offering attractive yields and strong lease profiles.

Located in Melbourne’s burgeoning south-east, the fully leased facility includes a BP petrol station and fast food outlets Red Rooster and Carl’s Jr. returning circa $1.048 million net on a 10.7 year WALE.

Stonebridge Property Group Partner Justin Dowers, who is managing an expressions of interest campaign for the property with fellow directors Kevin Tong and Phil Gartland, said the sale could hardly have come at a better time.

“Fawkner Property has chosen to market this property at a very opportune time. Yield has become very hard to find as have quality assets. If you can locate an asset that also offers a very strong lease profile including, arguably, recession-proof convenience centres, you jump on it,’’ Mr Dowers said.

He said the underlying land component of convenience centres also offered the potential for future expansion and development.

“This is one of the most strategically located convenience centres in the south-east of Melbourne given its significant highway corner exposure, a position which will continue to benefit from greatly increased traffic flows following the recent Westernport Highway expansion and a major new interchange with Thompsons Road,’’ Mr Dowers said.

The facility is located on nearly two hectares on the corner of Westernport Highway and Thompsons Road with 275 metres frontage and exposure to nearly 70,000 vehicles per day.

Mr Dowers said the property’s rental income was estimated to grow 40% over a 12 year investment horizon based on the fixed annual rental increase to all tenants. He said purchasers would also benefit from the fact that the asset had undergone a recent major refurbishment, providing substantial depreciation benefits and minimal capital expenditure requirements.

Mr Tong said low interest rates, including the RBA’s latest cut to 0.1%, and the imminent opening up of borders, were further factors likely to increase investor demand.

“The cost of debt has never been better providing investors with healthy arbitrage yields on income producing investments.

“This is another compelling reason to get into the market right now, a market which has essentially been at a standstill in Victoria since March.

“We are taking increasing enquiry from local investors who have been starved of opportunities. Add that significant pent up demand to that of interstate investors, with borders opening up again soon, and we anticipate seeing very strong competition for the limited amount of stock available for the traditional pre-Christmas rush,’’ Mr Tong said.

For further information please contact:

Justin Dowers | Partner | +61 438 098 805 | jdowers@stonebridge.com.au

Kevin Tong | Director | +61 422 848 818 | ktong@stonebridge.com.au

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