The recent sale of Dan Murphy Bathurst has only cemented the fact that retail remains ripe for private investor investment, transacting for $11.187million at a yield of 4.5%.

This yield is a regional NSW record for this asset class.

According to Steven Lerche, National Director, Retail Investments at Savills Australia, who negotiated the sale alongside colleague Andrew Palmer, “This assets class remains a highly sought after sector of the Australian market with groups bulking up on ‘Essential Services’ and ‘Daily Needs.’

“In the last four years, only 7 Dan Murphy’s liquor stores have sold, with Bathurst being the only one to sell this year.

“This recent sale of Dan Murphy’s Bathurst offers 1,282sqm* of Gross Lettable Area on a 3,952sqm* site and reaffirms that non-discretionary retail continues to ‘hit the spot’ and other sales in this asset class so far this year include Woolworths Kyabram, Woolworths Greenvale Lakes, Coles Woodend.

Freestanding supermarket yields over this four year period have tightened due to unprecedented demand and yields are now creeping into the high 3% territory due to private investors willingness to accept lower returns.

It is expected this trend is likely to continue in Q3/Q4 with groups eagerly looking for long term security and cash flow” he continued.
Mr Lerche said despite the effect of Covid -19 across the country, strong regional towns across the country have all prospered and will further benefit from local tourism whilst international border are shut.

“Investor demand for this sector is due to historical low interest rates and of course: Non-discretionary, Security of income, Flight to quality and Ease of management”.

Savills Australia also concluded a sale in Traralgon VIC for $84.5m at the beginning of 2021, further confirming that regional locations continue to hit the sweet spot for investors.

*Approximate