An ASX Top 50 tenanted retail property in Windang was snapped up by investors for $830,000 on a 6.99 per cent yield at commercial agency Burgess Rawson’s recent auction. 

The modern retail store comes with a secure five-year lease, plus options to extend until 2036 to Woolworths Limited’s liquor retailer, BWS.

The modern 197sqm retail store, located on Windang Road, was purchased by a Sydney buyer. 

“A location like this in Sydney could be worth three times the price, perhaps even more, so investors are looking to other cities such as Wollongong, NSW’s third largest city, to find great investments like this one,” Burgess Rawson associate director Kieran Bourke said.

“With this property, a top-of-the-range tenant and high exposure location are just two of many perks the new owners will be able to enjoy, as this high performing asset accrues a net income of $58,006pa plus GST.”

Mr Bourke said Sydney metropolitan properties were typically hotly contested, and therefore some investors were looking further afield to gain a higher return. 

Read more: Wollongong becoming increasingly popular among commercial property investors

“In the past 18 months alone, Burgess Rawson has sold more than $43 million in commercial property across the Wollongong region, which can be attributed to the increasing growth and strong interest we are continuing to see from our investors," he said.

"We're finding that inquiry numbers are curving upwards when we list down there, and people are becoming more familiar with the local suburbs of the Illawarra, such as Windang and Unanderra."

Mr Bourke said overseas investors could flock to areas like the Illawarra, as they were still easy to inspect due to relative close proximity to Sydney, and also because these "satellite cities" already boasted a strong population.

"I think the Illawarra is a good option for investors of all levels…. This was an entry level (investment)," he said.

"I think it's only going to go from strength to strength once people catch on that the yields can be slightly higher than say Sydney metro, and the tenants and the strengths of the population are driving factors for people to invest there."