Tyre & auto and automotive retail assets are proving to be among the most sought after by private investors, following a flurry of sales activity by Stonebridge’s National Investment Sales team. Over the course of 2022, the team brokered circa $22 million worth of sales within this sector, achieving benchmark yields in the process.
Most recently, Stonebridge completed the off-market transaction of a Bridgestone outlet at Labrador on the Gold Coast, purchased by a Sydney based private investor ‘sight unseen’ for $2,380,000, at a low 4.81% yield. The 1,095sqm site, situated at 126 Brisbane Road, has been used for tyre & auto retail for circa 30 years and is leased to Bridgestone until 2025 with a further option to 2030.
This same theme played out earlier in 2022 at Stonebridge’s inaugural National Investment Sales Portfolio Auction, whereby a Sydney based private investor fought off fierce national competition to secure the Bridgestone at Pinkenba on Brisbane’s TradeCoast. The property was again purchased ‘sight unseen’, for $4,250,000 at a benchmark yield of 3.99%.
Similarly, private investors have been increasingly drawn to large format retail freeholds leased to automotive tenants. In 2022, Stonebridge sold three properties leased to Repco and AMX Superstores, subsidiaries of GPC Asia Pacific, the largest aftermarket automotive parts supplier in Australia and New Zealand.
AMX Superstores at Morayfield, north of Brisbane sold at Stonebridge’s October National Portfolio Auction for $2,075,000 on a 5.33% yield. The 678sqm strata titled property is leased to 2033 with early termination dates every three years, resulting in a 1.7 year WALE. The property was purchased ‘sight unseen’ by a high-net-worth Melbourne based investor.
Two Melbourne properties leased to GPC Asia Pacific also attracted significant attention. An AMX and Repco retail investment at Epping in Melbourne sold off-market in April for $9,550,000 at a 3.93% yield. The 2,774 sqm retail showroom sits on a substantial 5,194 sqm land parcel and sold with a 2.3 year WALE.
Another AMX outlet at Keilor Park in Melbourne sold under the hammer in June, as eight investors competed for the property, driving the final selling price to $3,130,000 at a low 3.60% yield. The strata titled investment is part of a wider retail complex and comprised of a 702 sqm showroom with a 110 sqm mezzanine.
Commenting on the sales, Stonebridge’s Thomas Proberts said, “Tyre & Auto and automotive retail assets are proving amongst the most sought-after by private investors. A ‘future-proof’ outlook for the sector combined with the typically accessible sub $5 million price points, continues to drive strong demand. This is evidenced by our recent results, irrespective of the short WALE nature of certain assets.”
Stonebridge Partner, Tom Moreland said “Despite recent interest rate increases, the weight of capital seeking quality assets within resilient, non-discretionary industries such as tyre & auto remains strong, particularly for income producing assets with strong tenant covenants and fundamentals. These sales are testament to this.”
The appetite for standalone tyre & auto freeholds is set to be tested at Stonebridge’s first Portfolio Auction for 2023, with a trophy Bridgestone asset at Pimpama on the Gold Coast set to go under the hammer on Thursday 9th March.
The string of tyre & auto sales were brokered by Thomas Proberts, Tom Moreland, Rorey James, Michael Collins, Nic Hage, Kevin Tong and Sarah Xi.