Property investor BWP Trust has announced plans to purchase a site in Australind, near Bunbury, where associated company Bunnings Group intends to build a new warehouse store.
In a statement today, BWP said the purchase price of the land, currently owned by Bunnings, was about $8.3 million, while a further $9.7 million would be paid to Wesfarmers-owned Bunnings when development of the new warehouse was completed in June next year.
BWP’s acquisition of the site takes its number of properties on portfolio to 85, of which 79 are Bunnings Warehouses.
“The acquisition will be funded from existing debt facilities, and will be accretive to earnings from settlement,” BWP said.
The 2.85-hectare site is on the corner of Ditchingham Place and Kingston Drive in the subdivision of Treendale, Australind.
“A Bunnings Warehouse with a total retail area of 13,422 square metres and about 225 car parking spaces will be developed on the site,” BWP said.
“Land uses surrounding the development site include the Treendale Shopping Centre, fast food outlets, a petrol station, and industrial and residential precincts.”
Bunnings has agreed to lease the property on completion of the warehouse for $1.25 million per annum, on an initial 12-year fixed term, however, under the agreement rent will increase by 3 per cent each year.
The future warehouse would be in close proximity to various mineral processing, energy, mining, agriculture, timber and pastoral operations in the state’s South West.
BWP managing director Michael Wedgwood said the transaction provided a good opportunity for the business to add a well-located property to the portfolio.
In August, BWP reported a 22.4 per cent increase in its full-year profit to $92.8 million on the back of 10 land purchases that were leased to Bunnings.
Shares in BWP Trust were 1.2 per cent lower at $2.49 per share at the close of trade.
By Fraser Beattie
