QLD investor buys Burleigh Heads 99 Bikes strata for $1.6M

A PRIVATE Queensland investor has defied the doom and gloom predictions by purchasing a 99 Bikes tenanted strata investment in Burleigh Heads for $1,600,000 at 6/110 Kortum Drive.

The asset was marketed and sold by Ray White Commercial QLD Investment Sales Lachlan O’Keeffe and Michael Feltoe.

Mr O’Keeffe said because of the COVID-19 pandemic, the tenant’s business had experienced significant growth. National bike shops were increasingly being viewed by investors as the new ‘blue-chip’ covenant, as a by-product of being named an ‘essential service’ during the pandemic.

“During the sale process, investors expressed a preference to buy this ‘essential service’ tenant that was performing well, rather than a tenant which pre-COVID-19 was considered ‘blue chip’, but now unable to trade,” he said.

“The marketing campaign generated a total of 138 enquiries, and despite the increasing lockdown pressures, the property was sold cash unconditionally with a short settlement.”

Mr Feltoe said the sale represented a 5.7 percent yield.

“The strata asset was one of fourteen properties within the Burleigh Central Showplace large format retail centre. The sale was of a retail investment leased for 10 years to national retailer 99 Bikes,” he said.

“The lease included CPI increases and was guaranteed by ASX-listed Flight Centre Australia. Overall the gross lease was viewed by investors as containing predominantly tenant-favourable terms.

“The asset was originally scheduled to go to auction but we changed to an EOI sale process one week before the government’s closure of in-room auctions, for the safety of our clients.

“With many people using 99-Bikes’ success as the ‘pin-up’ for retail across social media, in the post COVID-19 landscape, we believe tenant covenants like 99 Bikes will be increasingly viewed by investors as worthy of being considered a trophy investment.”

Matt Turner, Managing Director of 99 Bikes said, “Since the successful sale of Burleigh Heads, 99 Bikes is now considering selling some of their company-owned properties in the future.”

*Approximately.