British fuel retailer EG Group notched up a 100 per cent clearance rate after selling nine of its Woolworths Caltex petrol stations for $54.5 million as part of a Sydney portfolio auction.
The fuel and convenience stations, which EG will lease back on new 15-year terms, sold on yields ranging from just 2.9 per cent to 5.75 per cent.
They were among 17 of 18 properties to sell as part of a retail and childcare centre property auction put together by agents Cushman & Wakefield and hosted by Cooley Auctions in Sydney just over a week ago.
In total, $94.3 million of property changed hands at an average yield of 4.73 per cent, and being $13 million above combined reserves highlighted the appetite among private investors for securely leased non-discretionary assets given record low interest rates.
There were 369 bids placed across the 17 offerings – an average of 22 bids per property.
Alongside the nine petrol stations, all five childcare centres offered sold under the hammer, including one in Brisbane that sold for $8.31 million to a Hong Kong-based investor on a yield of 5.8 per cent.
EG Group, founded by billionaire brothers Zuber and Mohsin Issa, acquired the nine petrol stations as part of a 2018 deal to buy 540 fuel convenience sites from Woolworths for $1.725 billion.
They included a property in Brookvale on Sydney’s northern beaches that changed hands for $8.8 million on a record-low 2.9 per cent yield.
Another petrol station in Newport in northern Sydney sold for $8.3 million on a 3.25 per cent yield.
“Seeing petrol stations sell on sub-3 per cent yields is reflective of the market dynamics at present, as high net worth investors continue to target defensive assets and scour the market for higher-yielding investment opportunities,” said Cushman & Wakefield national director Michael Collins.
“Private investor demand for commercial real estate assets continues to go from strength to strength, extending its run in late 2020.”
Extracted n full from: British giant cashes in as investors spend big on petrol stations (afr.com)