A WOOLWORTHS Caltex service station in Aitkenvale has sold for $3.84m as investors look to park their cash in properties providing good income backed by strong leases.
The Ross River Road servo was one of six Woolworths Caltex-branded sites in NSW, Queensland and the Northern Territory to sell at auction in Sydney last week by Cushman & Wakefield.
The sales had a total value of $40.23m showing yields for a Sydney service station at a near-record low of 3.71 per cent, although the return on the Townsville property was the highest of the six at 6.25 per cent.
Cushman & Wakefield’s head of national investment sales, Michael Collins, said the sales were further evidence that the fuel and retail convenience sector was running hot.
“Private and high-net-worth investors have continued their active search for yield during the pandemic and are targeting defensive investment opportunities backed by high-quality long-term leases,” Mr Collins said.
“The low yields recorded across many sites reinforced the yield compression we are seeing among these types of assets and are reflective of the lower-for-longer interest-rate environment. In particular, the market for fuel and convenience retail property has been among the best-performing alternative asset classes, with values remaining highly robust throughout the pandemic.”
The Woolworths Caltex-branded portfolio included assets in Bowen Hills Brisbane and Aitkenvale Townsville in Queensland, Chatswood, Burwood, and Byron Bay in NSW, and Bakewell in the Northern Territory. All properties were sold with new 15-year leases.
The auction also included retail, childcare and medical assets in Queensland and NSW.
The Burwood Woolworths Caltex service station was sold for $8.9m at a near-record 3.71 per cent yield, and two retail properties in Freshwater recorded yields of 4.11 per cent and 4.28 per cent.
The portfolio attracted more than 950 inquiries heading into the auction, with more than 150 people attending auction rooms in Sydney and Brisbane.
The properties were sold to a range of private and high-net-worth investors from local areas and interstate plus two funds management groups.