Fast food, MP’s office among $27 million portfolio auction

A KFC fast food outlet on Melbourne’s city fringe and an office leased to a Federal Liberal MP were among more than $27 million worth of property sold at the latest Burgess Rawson investment portfolio auction.

After property totalling $40 million was sold at the agent’s Sydney auction on Tuesday, buyers snapped up six of the 12 properties on offer in Melbourne on Wednesday, while a further five were picked off prior to auction.

Eight bidders weighed into the competition for a KFC at Deer Park in Victoria, with a local private investor securing the property for $4.14 million on a narrow 4.86% yield.

A Cheltenham industrial property leased to panel beater giant Gemini Smash Repair attracted six bidders and sold for $6.66 million on a 6.34% yield, while a shop leased to the Liberal MP for McMillan, Russell Broadbent, traded for $600,000 on a 7.7% yield, after a vendor’s bid of $599,000.

A Commonwealth Government-leased office in Warragul sold for $600,000.

Auctioneer David Scholes first had to weather a question from the gallery as to whether the office’s lease agreement would be voided if Broadbent lost the upcoming Federal election. But bidders were unperturbed.

Six of the 12 properties auctioned in Melbourne were passed in, though Burgess Rawson director Jamie Perlinger says offers have since been put forward on at least two more.

“There were some absolutely cracking results with the KFC and the Cheltenham property, and even the retail properties. The enquiry is still really good for good passive investments,” Perlinger says.

“There’s been offers put forward to the owners on two or three of them, which they’re working through at the moment.”

Among the properties sold prior to auction were a neighbouring seaside retail store and cafe in Mornington and popular Warrnambool pub Rafferty’s Tavern, which sold for $5.7 million.

A Cheltenham smash repair centre sold for more than $6 million.

“There was good interest on those five properties and offers were put forward to the owners that were acceptable and they decided to take them,” Perlinger says.

Petrol stations featured heavily across the two days of auctions, with mixed results. A Shell-branded station at Glen Innes in New South Wales sold for $1.86 million, a BP at Scone in New South Wales sold for $4.6 million on a 7.6% yield and another station leased to Freedom Fuels Australia in Capalaba, Queensland, went for $4.176 million.

But a BP-leased station in Cranbourne, Victoria, failed to find a buyer at $5.95 million, while a Shell at Gympie in Queensland was passed in at $4.7 million.

Childcare centres were also well represented, with a centre at Everton Hills in Brisbane trading for $3.5 million on a 5.45% yield, but a pair of Queensland centres leased to Goodstart Early Learning in Mackay and Gladstone were passed in.