By Aimee Chanthadavong

Bunnings Property Management, the responsible entity for the Bunnings Warehouse Property Trust, has acquired a Bunnings Warehouse in the suburb of Port Melbourne, Victoria.

Purchased for the price of $24 million, the three hectare property comprises a total retail and office area of 13,846 square metres with approximately 327 car parking spaces. It is approximately 2.5 kilometres southwest of the Melbourne central business district.

Grant Germhoefer, Bunnings Property Management general manager, told Retailbiz that the acquisition is just another addition to the company's investment portfolio.

"The point of acquiring the Port Melbourne property is as an investment for unitholders, to provide income and longer term capital growth," he said.

The property was sold by an institutional owner through a public campaign.

According to Germhoefer, the acquisition will not affect normal retail operations at the store.

"The lease to Bunnings Group Limited has over 9 years of the initial term left and BGL has four options to extend for a further five years each, so our acquisition of the property shouldn’t affect the normal retail operations," he said.

The property is leased to Bunnings Group, with an initial term expiring in March 2020 and four options, exercisable by the tenant, for a further five years each. The rental will be reviewed annually to the consumer price index and subject to a market review in March 2013 and at the exercise of each option.

The passing annual rent of $1,650,288, which will be subject to a CPI review on 17 March 2011, represents an initial yield of 6.9 per cent on the purchase price of $24.0 million. The acquisition will be funded from current cash reserves.

The acquisition increases the number of Bunnings Warehouses owned by the Trust to 54 and brings the total number of properties in the portfolio to 60.