Should I buy a Bunnings Warehouse?

Discussion in 'Commercial Property' started by Beelzebub, 11th Aug, 2015.

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  1. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    I've just bought comm opposite a brand new Bunnings. Hopefully that will give me the best of both worlds - comm people want to to be close to Bunnings to get the drive by traffic and it can be utilised by different companies upon end of lease.

    And don't forget many CIP leases have a CPI increase in rent on them each year so for the next 12 years his yield will increase.
     
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  2. Scott No Mates

    Scott No Mates Well-Known Member

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    It beats arguing with idiots what a market rent is and why they need to pay it.
     
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  3. Ace in the Hole

    Ace in the Hole Well-Known Member

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    At lease the guy bought the right hardware store and didn't go with Masters....
    A possible 54 stores to shut down to stop the bleeding for Woolworths.
     
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  4. Hanison

    Hanison Well-Known Member

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    Masters - Too big to fail apparently
     
  5. charttv

    charttv Well-Known Member

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    I was thinking that re: that transaction. Up-front yield today ain't that crash hot. However, a few years down the track may have ratcheted up to ~8-10% perhaps the good Doctor was thinking long term?
     
  6. geoffw

    geoffw Moderator Staff Member

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    Many years ago, a colleague was looking to join a syndicate buying a Bunnings store premises, with a ten year lease and supposedly solid fundamentals.

    When the lease finished, Bunnings moved out. Apparently a hardware store in an industrial suburb wasn't worth doing. I don't know if my colleague ended up investing.
     
  7. Chilliblue

    Chilliblue Well-Known Member

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    Note that even Bunnings have a few sites that they are thinking of offloading.
     
  8. legallyblonde

    legallyblonde Well-Known Member

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    At least it isn't Masters?

    Seriously though, 5% on a commercial is pretty shocking! But I am biased by Tassie returns!
     
  9. mrdobalina

    mrdobalina Well-Known Member

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    What kind of returns do you get in Tassie?
     
  10. Scott No Mates

    Scott No Mates Well-Known Member

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    Same as everywhere else on Boxing Day - unwanted hedge trimmers, chainsaws, eskies, BBQs, tinted paints, water blasters, lawn mowers & every tool imaginable.
     
  11. Fargo

    Fargo Well-Known Member

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    I dont think he will ever get 8% for that site, he will be lucky if he doesn't get negative growth. I see an empty shed their in 10 years time when it is too small for Bunnings and too large for any-one else. Its not like their is a shortage of land.
     
  12. Fargo

    Fargo Well-Known Member

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    Hell yeh, when interest rates go to 6% and he has 200k left over @ 50% LVR, instead of 450k . He wuld be better investing in BWP.
     
  13. Fargo

    Fargo Well-Known Member

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    Actually he would probably need to pay more than than 6% for a commercial loan so 5% is poor.
     
  14. legallyblonde

    legallyblonde Well-Known Member

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    Not something that I follow closely.. But 10% is not unusual to see (flipping in the real estate guide each week)...

    I know a few people that have places 25 minutes out of Hobart... All getting 10% (when fully let) with pretty strong occupancy figures.
     
  15. Omnidragon

    Omnidragon Well-Known Member

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    Without knowing anything about the site, 5.1% is not an attractive yield.

    If it's a major development site it's dirt cheap and I'd rather they default and leave. Onsell to developers for 0.2% yield.

    So as an example I was looking at a Woolworths site on 6% yield in a hot suburb a few months ago. Passed over it because Woolworths had a long lease. I actually wanted them out, and out asap.
     
  16. TMNT

    TMNT Well-Known Member

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    im sure hyou could buy a masters for a loose change