Coronavirus hits commercial property auctions
Commercial real estate agencies are rapidly pivoting towards private treaty sales after coronavirus restrictions forced the cancellation of auctions across Australia.
The industry was turned on its head overnight as the Prime Minister announced auctions and open for inspections were now banned under a wave of new restrictions aimed at stemming the outbreak of COVID-19.
Many auctions scheduled for the coming weeks have subsequently been cancelled, with many commercial property agencies now offering those properties via private treaty arrangements.
Among those most affected by the changes is commercial agency Burgess Rawson, which holds regular Portfolio Auctions in Melbourne and Sydney and was scheduled to host its next Melbourne event early next month with further health measures in place.
Compounding the challenges, the Melbourne auction is held at Crown Casino, which was effectively closed after the government axed all non-essential services.
Burgess Rawson director Ingrid Filmer says the agency will instead shift the 18 properties listed for the Melbourne auction to deadline private treaty sales.
“In light of the increased containment measures and Monday’s shutdown of Crown Casino as announced by the Victorian Premier, we anticipate that the ability for us to hold an auction of any kind will be removed completely,” Filmer said in a statement.
“To remove any uncertainty, interested buyers will be asked to submit their best offers for the properties on contract by 1pm on Friday (March 27).”
Burgess Rawson’s Sydney auction, originally to be held at Doltone House, has also been cancelled and the 16 properties originally listed also to be sold via deadline private treaty, which closes on Monday at 3pm.
Melbourne-based agency Allard Shelton announced similar measures late on Tuesday, confirming a change in sale process after all future auctions were cancelled.
“Our current auction campaigns will now revert to expressions of interest campaigns, with the same closing date and times,” the agency says.
In a positive sign for the market, a number of properties originally listed for Burgess Rawson’s Melbourne auction have already sold, including a brand new Liberty service station at Rosebud on Melbourne’s Mornington Peninsula, which traded for $7.6 million on a tight 5.5% yield.
A Tarneit childcare centre with a long lease to Sparrow Early Learning was also snapped up by a Sydney-based investor for $5.45 million, reflecting a 5.79% yield.