Bunnings Collingwood, a truly unique investment
Strategically situated in one of Melbourne’s most cosmopolitan and thriving suburbs, the landmark Bunnings site in Collingwood is set to create competition between local family offices and offshore Asian developers after being listed for sale through Burgess Rawson’s Billy Holderhead, Yosh Mendis, Zomart He and Beau Coulter.
Commanding one of the city’s most dynamic promenades, Victoria Parade, and overlooking the unmistakable intersection of Hoddle Street, the iconic site is expected to sell for around $65 million.
Mr Holderhead said the significant asset is one of the largest individual holdings in the area with the just launched property attracting keen interest from a diverse range of buyers, domestic and international.
“The site is extremely unique compared to any Bunnings freehold investment every offered, presenting a steady income stream from one of the most sought-after tenants in the Asia Pacific, underpinned by a major, city-fringe landbank opportunity for a legacy development in the future.
“Collingwood’s skyline has changed dramatically over the past three or four years, perhaps more so than any other suburb in Melbourne. The tightly-held home of the Pies has enjoyed phenomenal cultural, culinary, artistic and socioeconomic transformation in that time too. And with the population projected to grow by 72% by 2041, Collingwood is set to see this evolution continue for many years to come.”
Bunnings Collingwood sits on a 5,375 square metre site zoned Commercial 1 – very rare for their sites across Victoria – allowing for a range of potential future development options.
Mr He said, “across their Victorian network, Bunnings stores are typically located within Industrial or Commercial 2 zones, meaning that – despite the scale of their landholdings – the vast majority of Bunnings sites can never be converted to any sort of residential, mixed use or hotel development, unlike this site.”
“In Collingwood, Urbis assessed the property as having the potential to build up to 14 levels based on recent approvals, while owners of sites nearby have been pushing for approvals up to 23 levels,” added Mr He.
Based on discussions with buyers in the few days since the launch of the sale campaign, Mr Coulter said he expected strong competition, particularly from local private family offices and Asian developers looking at the property as a strategic and defensive investment, “because the underlying land value of the site will reflect around 75% to 80% of the purchase price.”
“It’s apparent that buyers are seeing this differently to any Bunnings freehold they’ve considered before. Private investors are assessing its set-and-forget Bunnings investment value (now) as well as a legacy value of a high-rise development site for their children in the future,” said Mr Coulter.
“For our Asian developer client base, their main focus is the long game and the priority of characteristics that appeal to them are perhaps in reverse order (compared to domestic private investors).
“In this case, Asian buyers’ first focus is the location on the City’s doorstep, the disproportionately large landholding (second), then zoning for future mixed use development (third), and a significant, set-and-forget income stream from Bunnings (fourth),” added Mr He.
Mr Coulter said that whilst the site has great appeal as a potential and significant redevelopment site, it also provides a solid investment as Bunnings has no plans to vacate their priceless Collingwood location, their closest store to Melbourne’s city grid with a unique trade catchment.
