Commercial auctions flirt with magical $1bn mark
Investors have stuffed their Christmas stockings with almost $100 million worth of commercial property at the final Burgess Rawson investment auctions of the year.
The twin auctions in Sydney and Melbourne saw around $98 million in properties sold in two days, bringing total sales for the year’s auctions across both cities to almost $1 billion.
The 305 properties sold at the eight portfolio auctions this year totalled $956 million, with a clearance rate of 84%.
Banks and service stations continue to be keenly sought after among bidders, with a trio of properties leased to Westpac in country Victoria snapped up on Wednesday.
The most popular of the three was the Westpac on Mitchell St in Bendigo, which sold for $4.575 million on a tight 4.22% yield.
A retail complex in the Hobart CBD sold on a yield of more than 9%.
The two-level, 795sqm building is leased to Westpac until 2025 and returns more than $193,000 in rent per year.
A larger Westpac on Sturt St in Ballarat sold for $5.7 million on a 6.59% yield, while the third, in Wonthaggi, went for $1.275 million.
A Caltex service station in Deer Park, Victoria, and a Shell Coles Express in Coffs Harbour both found new owners, with the Shell property going for $6.21 million on a 6.11% yield and the Caltex for $4.8 million on a yield of 5.9%.
Mac’s Hotel in Kilmore sold for $880,000 at the final Burgess Rawson auction of 2015.
A South Australian childcare centre leased to industry giant G8 Education in Salisbury Heights sold for $1.8 million, while a site leased to Dan Murphy’s and Dick Smith reached $8.1 million on a 6.59% yield.
Burgess Rawson director Graeme Watson says with a number of properties already set to be sold at the next auctions in February, the tenanted commercial property market is showing no signs of abating.
“The market hasn’t shown any pause and investors have a strong preference for branded tenancies, as we’ve seen with the banks,” he says.
Watson says investors are now looking at less traditional, niche properties, in order to secure the best investments.
“The broader market is also now focusing on properties that specialist investors were attracted to, like petrol stations and childcare. The strength of the market is such that they’ve had to look at properties that they previously wouldn’t have considered.”
Investors also showed they were prepared to look further afield for opportunities, with a retail complex in the Hobart CBD, featuring high-profile tenants including Sheridan, Ella Bache and Ishka and net rent of more than $550,000, grabbed for $5.8 million on a 9.46% yield.
Proving that popular local assets have a place alongside big name brands, Kilmore hotel Mac’s sold for $880,000 on a yield of 7.95%.
Keen bidding for a Whittlesea fish and chip shop pushed the price out to $935,000 and the yield down to 5.76%, while a neighbouring deli and cafe sold for $730,000.
