Stonebridge has announced the sale of 14 freestanding investments as part of their August portfolio, sold via a combination of Portfolio Auction and Expression of Interest campaigns earlier this month. Spread across the sought-after segments of fast food, childcare, fuel & convenience retail, and supermarkets, the recent results total $93.6 million of transactions, drawing national and international interest from private investors.

Leading the results is the sale of a 120-place childcare centre for $12,200,000 at a 4.97% yield in Sydney’s north-west growth corridor. The asset, situated 50km from the CBD at 186 Old Pitt Town Road, Box Hill, is secured by a 15-year lease to 2038, to premium Sydney-based operator, Young Academics. The centre occupies a 2,303 sqm corner site and provides brand-new improvements.

In Melbourne, a record breaking Pub transaction has occurred with the sale of ‘Fargo & Co’ at Swan Street in Richmond, a prominent hospitality venue underpinned by a 10 year lease to Australian Venue Co. The $10.7 million sale to a private investor reflects a 4.4% yield and land rate per sqm of over $32,000.

Commenting on the sale, Stonebridge Partner Rorey James said, “The Fargo & Co. deal highlights the resilient nature of prominent pub tenanted investment and rivals yields paid during the bottom of the interest rate cycle three years ago.”

The August National Portfolio Auction campaigns comprised 6 assets and achieved a strong 84% clearance rate. Fast food and childcare were the winners, with two prized fast food investments in regional NSW selling.

KFC Glen Innes received 45 bids before being sold to a Brisbane-based private investor at a 4.07% yield, reflecting a $930,000 capital value. Nearby, KFC Grafton is under contract to an interstate investor, with a result to be announced shortly. Investors were drawn to the attractive price point of each asset, longstanding tenants onsite for 25 and 40 years respectively, plus strategic landholdings supported by high traffic volumes.

Headlining the fuel & convenience retail outcomes were two assets offered on behalf of EG Group, with 15 year lease-back arrangements to the global giant. EG collected over $13 million from the portfolio sale offering. On the Sunshine Coast, in Stockland’s ‘Aura’ development near Caloundra, a brand-new service station fetched $8,100,000 at a 5.86% yield. In Roxburgh Park, Melbourne, a modern site situated adjacent Greenvale Lakes Shopping Centre also traded to a private investor for $5 million at a 5.98% yield. The campaigns generated over 300 enquiries and 14 formal offers to purchase.

In Queensland, a flurry of childcare sales have taken place, led by the sale of a 75-place centre in Brisbane’sFerny Grove leased to national operator, Sparrow Early Learning. The asset, situated at 1 Hogarth Road and redeveloped by Griffith Group, traded for $6,290,000 at a 5.48% yield. The property sits adjacent two large primary schools and benefitted from an extensive refurbishment to a 25 year old building. On the Gold Coast, three further transactions include Goodstart Pimpama, Goodstart Mudgeeraba and Reedy Creek Childcare Centre. The latter, underpinned by a 12-year net lease to 2035 to a private operator, generated 26 bids at the national portfolio auction before the hammer fell for $2,250,000 at a 5.41% yield to a local investor.

Stonebridge Partner, Tom Moreland noted “We have witnessed a genuine resurgence across the freestanding market in the last 6-8 weeks, evidenced by a marked 25% increase of enquiry levels and supported by a raft of exceptional sale results, particularly across the ever-popular childcare sector whereby seven offerings within the portfolio are sold or under contract, at pricing levels from $2 million up to circa $19 million.”

Stonebridge Partner, Michael Collins added, “High net worth private investors continue to return to the market with earnest, given improvements in sentiment and the beginning of interest rate reductions across global economies including the US, with some Australian banks already now pricing in fixed rate reductions. We expect transaction volumes to increase throughout the balance of 2024 and likelihood of yield compression in the short to medium term as investors return to the market.

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