Hobart hot streak continues at portfolio auction
Investors’ taste for Tasmania shows no signs of waning, with five properties on the apple isle selling as part of Burgess Rawson’s latest Investment Portfolio Auction campaign.
A North Hobart property leased to Nando’s headlined the sales, with the chicken outlet and two upstairs apartments fetching $3.92 million from a Launceston buyer at the agency’s Melbourne auction on Wednesday, amid hot competition for well-located fast food assets.
A string of four Tasmanian car dealerships, leased to automotive giant AP Eager, sold outside the auction room to private investors from Launceston, Hobart and Melbourne, as well as a syndicator.
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“It’s another huge vote of confidence in the Tasmanian market,” Burgess Rawson director Billy Holderhead says.
“CPI increases in Tasmania are well over and above Australia’s mainland cities, at 3% compared to the next best at 2.5%. The Tasmanian market is thriving and we’re continuing to see investors queueing up to get a piece of it.”
Three more car dealerships also listed for sale are currently under negotiation.
In other results at the Melbourne auction, a Sale property leased to the plane manufacturer behind famed aerobatics outfit the Roulettes and the Royal Flying Doctor Service was quickly snapped up, with the asset sold for $960,000 on a 6.88% yield, while a longstanding Amcal pharmacy at Shepparton in regional Victoria sold for $1.66 million, with the 5.99% yield one of the day’s sharpest.
Meanwhile at Sydney’s auction on Tuesday, a Dominos-anchored property with four tenants in the Cairns region sold for $1.90 million to a Townsville-based buyer on an 8.7% yield.
And a large format retail store with adjoining warehouse space leased to Dulux paints at Tuggerah on the NSW central coast sold to a Sydney-based family for $2.272 million on a sharp 5.87% yield.
Other auction action was more subdued, with Burgess Rawson director Shaun Venables pointing to stricter bank lending and investor unease over the upcoming Federal Election as impacting the market.
But he says there remains an encouraging level of interest in commercial property and expected a strong response in the coming months.
“Childcare and fuel are tough at the moment – two asset classes where there’s a perception of an oversupply and the banks are being a little stricter in their lending,” he says.
“But we’re really encouraged by the fact that we had bidding on all bar two properties, despite there being an obvious gap between vendor and buyer expectations.”
“Bidding wasn’t too far off the reserve prices, and we would expect conclude a number of those sales throughout the remainder of the week.”
“In 15 years of running these events, days like today inevitably fire buyers up. Investors often look at it as conditions now being more favourable for them, and they’ll be licking their chops in anticipation of May’s auction.”
Rounding out the auction results, a Reject Shop discount store and a neighbouring bakery and fashion outlet at Roma in Queensland both sold strongly, with the Reject Shop trading for $1.95 million and a local buyer winning the keys to the bakery for $1.67 million.
Burgess Rawson’s next Investment Portfolio Auction is on Tuesday, May 14 in Sydney and Wednesday, May 15 in Melbourne.