The land was the final asset in Charter Hall’s direct automotive trust No.2 fund, which bought it for an undisclosed sum in 2018. The sale represents a yield of 4.66 per cent.
Charter Hall’s funds owned many of the dealership sites of AHG as the automotive retailer preferred to avoid property purchases. This is in contrast to the property acquisition policy of AHG’s new owner, Eagers Automotive, that is currently on a property consolidation program.
Mitsubishi Liverpool, which occupies a 7684 square metre site at 375 Hume Highway in Liverpool, NSW, and is 27km south-west of Sydney’s CBD, was previously known as McGrath Mitsubishi Liverpool.
The sale was made by Stonebridge Property Group, which said it was sold to a private Melbourne-based investor and that the sale was “highly competitive” with 10 first-round offers.
Eagers has 12.4 years remaining on the lease.
Stonebridge partner Philip Gartland said the weight of demand for retail property “has created a perfect environment for investor demand for high-quality assets on long lease terms to strong tenant covenants”.
“Private investors and syndicates are desperate for high-quality, modern income-producing assets particularly those with outstanding land fundamentals, but stock levels are at all-time lows,” he said.
“For the Liverpool property, 17 buyers requested contracts and 10 of those lodged competitive offers. These are very strong numbers that resulted in attractive pricing and an unconditional exchange.
“The investor landscape is changing quickly as investors are broadening their mandates in order to secure stock.”
Stonebridge’s Melbourne-based partner Justin Dowers said one of the reasons for growing retail interest was that the cost of debt has never been lower.
“This provides investors with healthy arbitrage yields on income-producing investments,” he said.
“The profile of the buyer group was surprisingly diverse, from private investors, commercial office investors through to syndicators and Asian investors.”
Mr Dowers said enquiries from Melbourne-based private investors had “exploded over the past few weeks” as they emerged from the COVID-19 lockdown, which is putting additional pressure on pricing for quality assets.
By Neil Dowling