Original Article by Valerina Changarathil – The Australian – Fund manager ICAM buys ‘Covid-proof’ Bunnings Modbury site
SA-based alternative investments fund manager ICAM has bought the Bunnings-leased Modbury site for $22.8m, making inroads into a tightly-held ‘Covid-proof’ retail precinct.
Inheritance Capital Asset Management (ICAM) has bought the 100-per cent freehold interest at 933-945 North East Road, Modbury, which is leased to the Wesfarmers-owned business until at least 2025 with four, five-year renewal options thereafter.
The vendor was Adelaide Property Management.
Located in tightly-held retail hub in proximity to the Modbury Triangle Shopping Centre and Adelaide’s largest retail centre by area, Westfield Tea Tree Plaza, the Bunnings-tenanted asset is viewed as ‘Covid-proof’ due to its stable long-term income stream.
Freestanding Bunnings-leased freehold properties are historically tightly held and sought by investors due to the certainty of income.
Only 22 warehouses were brought to market between 2016 and 2019 ahead of Charter Hall’s landmark acquisition of a portfolio of six Bunnings assets in late 2020 for $353m.
ICAM, which has five property and infrastructure funds and has $395m in assets under management, said the site also had strong prospects for population growth.
ICAM managing director Freddy Bartlett said the business was “delighted” with the retail site, which has a gross lettable area of about 8055 sqm.
“It is a well-located, high-quality strategic retail asset at an attractive yield, and continues our strong momentum following a successful $40m plus capital raising with Morgan Stanley for the ICAM Duxton Port Infrastructure Trust,” Mr Bartlett said.
“We are eager to engage with Bunnings as landlord, leveraging the site’s prominent position on a major carriageway and its proximity to South Australia’s largest regional shopping centre by area.”
“We believe the site represents a rare land holding given the shortage of similar parcels suitable for large format retail or industrial development in the tightly held and burgeoning catchment area.”
ICAM is actively seeking additional strategic retail assets to further expand its property portfolio.
The transaction was negotiated by Jamie Guerra and Ben Parkinson from JLL.
Mr Guerra said Bunnings assets continue to attract core capital.
“Investors are particularly attracted to secure, well-leased retail opportunities in South Australia providing attractive yields and no stamp duty on commercial transactions,” he said.
“ICAM recognised the value of the Bunnings lease and with their existing retail expertise were attracted to the tightly held Modbury precinct.”
ICAM co-owns Westpac House with ASX-listed Abacus Property and the Churchill Centre North shopping centre site, anchored by SA’s only Costco store, with Southern Cross Equity.
ICAM, which has a diverse base of clients comprising institutional investors, family offices and high-net-worth individuals, also owns two ports in SA, Lucky Bay and Wallaroo.
