A MELBOURNE-based private syndicate has pumped up its portfolio with a newly built service centre south west of Brisbane.

They paid $7.525 million for a 7-Eleven anchored service centre on Springfield Parkway in Springfield, after an expressions of interest campaign by JLL’s Campbell Bowers and Andrew Havig.

Mr Bowers said the sale signalled returning strength to the market for service station-anchored properties driven by the low cost of debt.

“The sale attracted over 75 inquiries from national and international parties, and six offers to purchase at close,” he said.

It was developed by Citimark Properties on a 3242sq m site and opened about a year ago. 7-Eleven holds a 15-year lease and there are three other tenants — a Subway, a tobacconist and a sushi train.

The property was sold with a weighted average lease expiry of 11.88 years and it was sold with an initial yield of 6.14 per cent.

Mr Bowers said the market was still tightening.

“While fast food is leading the charge with the yields that are being achieved servos are not too far behind,” he said.

“We are expecting yields to further tighten again this year driven by the low cost of debt which is allowing investors to compete for quality assets.”

The service centre is in a fast food precinct adjoining a McDonald’s and KFC and is opposite a Coles supermarket.

Mr Havig said there was an increasing number of southern investors seeking passive investments in southeast Queensland.

“We are seeing a tightening in service stations yields again,” he said.

“While stand-alone service stations are selling for a tighter yield there is a lot of demand for those with other retailers and they generally move into a higher price point.”

Extracted from Courier Mail