KMART SEES OXENFORD AS HOT PROPERTY
Written on the 14 April 2015
DISCOUNT retailer Kmart Australia has identified Oxenford as hot property, prompting the company to set up its first stand-alone store on the Gold Coast in the northern suburb's commercial heart.
Kmart is developing the 6200sqm store on a 1.35ha site adjoining Bunnings warehouse on Tamborine-Oxenford Road.
Now it is searching for a buyer for its latest store, which is expected to sell around $20 million, with Kmart planning to lease the property for the next 12 years.
Peter Tyson, who along with Savills retail Sales colleague Jon Tyson will be marketing the investment by expressions of interest, says the property has only been on the market for less than a week and the inquiry rate has been strong.
"We expect the asset to be keenly sought by investors due to the blue-chip covenant and the long-term 12-year lease," Tyson says.
"Properties that are this well located with tenants of this calibre and such long-term leases are rare in the marketplace. These investments have been tightly held as they are difficult replicate in the current market."
Kmart has honed in on Oxenford despite operating another store a few kilometres south at Helensvale Town Centre. The retailer, owned by Wesfarmers (ASX:WES), is understood to be targeting an east-west catchment at Oxenford.
Kmart's decision to establish a stand-alone store is not unusual, although more commonly they are located within larger retail centres. Wesfarmers also owns Bunnings and developed its store there in 2012.
"This site effectively represents the last large-scale opportunity for a major retailer to enter the precinct," says Tyson.
"It is an underserviced catchment with the nearest retail facilities to the north in Beenleigh, about 25km away."
Tyson says the new Kmart store will benefit from large format retailers nearby such as Super Amart, Fantastic Furniture and The Good Guys.
"The surrounding Oxenford retail precinct has evolved rapidly over recent years in response to the demands of the burgeoning population growth in the northern Gold coast corridor," says Tyson
"This precinct is strategically positioned on a major traffic node and has traded strongly due to ongoing strong population growth in the surrounding communities which have a significant footprint" Mr Tyson.
The project is expected to be completed towards the end of this year and the expressions of interest campaign will close on May 6.
Tyson expects the property to generate national interest from industry funds, real estate investment trusts and private investors.