Buyers bite back at $23m portfolio auction
The commercial real estate market has received a ringing endorsement at Burgess Rawson’s latest Investment Portfolio Auction, with buyers out in force and driving a stunning clearance rate of almost 86%.
Twelve of 14 properties sold for almost $23 million combined at the auction event at Crown Casino, in a bidding frenzy rarely seen anywhere in the market in the past 18 months, while another property sold post-auction for $6.2 million.
Burgess Rawson director Billy Holderhead says vendors who are prepared to test quality properties on the market are being rewarded.
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“They’re meeting the market head-on, and the market is responding,” Holderhead says.
“We’re pitching properties honestly and with realistic yield expectations and as a result we’ve just seen some of the best commercial property auction results anywhere in the country since late 2017.”
The appeal of medical-based properties among investors has never been stronger, with a string of assets selling impressively.
As auctioneer David Scholes said, “You can’t go online to get braces”, and buyers agreed, with a pair of orthodontist-leased properties in Melbourne’s northern suburbs both trading on yields of just over 6%.
The first – a double-fronted retail space in Caroline Springs, leased to Clear Orthodontics – sold for $1.56 million on a yield of just 6.09%.
Moments later the hammer fell at $1.451 million for another Clear Orthodontics location at Broadmeadows, while a veterinary clinic at Cranbourne North reached $975,000 on a sharp 6.13% yield.
“Medical-tenanted properties continue to be among the safest and most sought-after investments, due to the fact that those businesses will always need bricks and mortar real estate in order to service their clientele,” Holderhead says.
Childcare properties continued to gather major momentum, with two Queensland centres attracting a combined 60 auction bids.
A centre at Buderim, well-located opposite a shopping centre and with another Coles-anchored centre in the works across the road, sold for $4.11 million on a 6.02% yield. Another Queensland facility at Port Douglas was won for $2.805 million, representing a 7.05% yield.
Regional hardware properties also sold strongly. A Tradelink outlet at Warrnambool in Victoria fetched $1.76 million on a 6.66% yield, while a Deniliquin site leased by major independent retailer Dahlsens sold for $902,000.
A Pakenham bakery made for an excellent entry-level buy at $500,000, on a 6.92% yield.
A major Tasmanian Government-leased property at Prospect sold after auction for $6.2 million to a Melbourne buyer.