AMP Capital Investors, on behalf of the Property Income Fund, has sold the Yass Highway Service Centre for circa $23 million, reflecting a passing yield of approximately 8%. The property which is underpinned by a new 10 year lease to Caltex for 70% of the passing income, is the last of the properties to be sold by the AMP managed, Property Income Fund.
The sale of the Yass property to an entity managed by leading Australian property syndicator – Fawkner Property Group, was handled by the Sydney office of MMJ Real Estate – Chris Johnson & Bob Houston, MMJ Canberra – Nick George & Gavin Obst, jointly with Colliers International’s Sydney office – James Wilson & Harry Bui. Fawkner Property Group has been particularly active in acquiring Highway Service Centres, having recently purchased two Victorian assets located at Longwarry and Little River for circa $23 million and $29 million respectively, both reflecting yields in excess of 8%.
Yass Highway Service Centre is a fully leased service facility which includes a Caltex Petroleum Service Station – incorporating a Star Mart Convenience Store and Coolabah Tree Café. Additional blue chip tenants include McDonalds and KFC.
The Service Centre is located in southern NSW on a 5.87 hectare site and is strategically located on the junction of the Hume Highway and Yass Valley Way, on major arterial route that connects Sydney (280km), Canberra (70km) and Melbourne (600km).
In commenting on the sale, Chris Johnson – CEO, MMJ Real Estate stated “that there is currently a strong appetite in the market for quality Highway Service Centres in strong locations and we certainly experienced this in the level of demand we had for this asset.”
James Wilson, NSW Director of Retail Investment Services at Colliers International Sydney office stated “the demand for retail investments in the sub $50 million range is certainly strong at present. “Investors are chasing stable returns with strong covenants, both of which were evident in this asset. The asset also has future development opportunity either via potential subdivision or future development on surplus land”
AMP took over the Property Income Fund when it previously acquired GIO and the fund was restructured in 2001, growing to an asset base of over $1 billion before unit holders agreed to wind up the close-end fund.
AMP Capital Head of Property Funds Management Chris Judd said: “We are pleased to complete PIF’s final transaction and that the fund was able to capitalise on the strong market appetite for quality service centres in good locations.
“This sale marks a significant achievement that has seen the fund deliver what it set out to deliver to investors – providing steady income with capital growth over the investment period.
“Investors have benefited from a consistent and disciplined acquisition strategy, strong asset management and prudent divestment of assets that has delivered a total return in excess of 9 per cent.”