Investors stock up with $70m in Portfolio Auction deals

Commercial property buyers have seized almost $70 million worth of property at Burgess Rawson’s final Melbourne Portfolio Auction event of 2019.

With 16 properties selling as part of the campaign, it caps an extraordinarily successful second half of the year for the iconic auctions, which continue to achieve consistently high clearance rates.

A Coles supermarket at Drouin produced the day’s standout result, selling immediately after auction for $12.5 million.

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The property at 10 Hope St featured a sought-after 20-year lease to Coles in one of Victoria’s most significant growth areas, just 33km from metropolitan Melbourne and occupying a commanding 4874sqm site.

The Coles at Drouin in regional Victoria.

Burgess Rawson director Raoul Holderhead says it was a strong outcome amid ongoing investor demand for blue-chip retail assets.

“It was a great result and one we expected, given some of the recent results for other supermarket assets such as Coles Hamilton and Woolworths Seymour, which both sold on yields of just over 5%,” Holderhead says.

“It’s a very strong finish to a year in which there has been a lot of negative press around property, but today is yet another indication that people are readily turning to the security of bricks and mortar assets with strong leases in place.”

Just weeks after the landmark sale of 15 7-Eleven service stations at Burgess Rawson’s previous auction event, one investor bought a pair of 7-Elevens in Queensland, with the Caboolture and Toowoomba properties snapped up for $5.585 million and $4.935 million, respectively.

Another service station leased to Woolworths at Coburg sold on a sharp 5.07% yield for $5.22 million, while an entry-level United fuel retail asset at Wivenhoe in Tasmania was purchased before auction for $575,000.

The Peter Stevens car dealerships in Ballarat.

The home of iconic Ballarat car dealership Peter Stevens Motors sold to a buyer for $8.7 million, with the well-located site at one of the region’s busiest intersections trading on a 6% yield.

Childcare centres capped a remarkable 2019 turnaround, recording a string of stunning results as a number of centres sold on yields of 6% or lower.

A prime Melbourne bayside centre at Black Rock sold for $5.055 million on the day’s tightest yield of 5.06%, a St George Montessori centre at Hammondville in NSW was sold before auction for $3.701 million, representing a 5.13% yield, while a property at Nundah in Queensland fetched $4.975 million on a 5.84% yield.

Another site leased to Village Early Education at Ararat in regional Victoria was sold before auction for $2.73 million, representing a 6.04% yield, while an under bidder on the 7-Eleven properties purchased a G8 Education-leased centre at Innisfail in Queensland for $1.825 million.

33 Main Rd, Wivenhoe was touted as one of the “year’s most affordable commercial investment opportunities”. Picture: SUPPLIED

A Melbourne buyer cleaned up with the purchase of a Pimpana property leased to Hoppy’s Carwash, paying $2.245 million on a 5.81% yield.

Another affordable Tasmanian asset was well received, with a Devonport property leased to Bursons Auto Parts snapped up for $655,000, while the hammer fell at $1.603 million for an office building at Kyabram, marking an 8.95% yield.

Holderhead says the strong 2019 finale is a good indication of what is expected from the market in 2020.

“There hasn’t been a lot of quality stock on the market this year, however in the second half of 2019 investors have been presented with some good opportunities and they have responded,” he says.

“We believe it will be more of the same coming into the new year. We’ve already got a strong list of properties ready to hit the market in late January, and there are still plenty of unsatisfied investors out there.”

“Burgess Rawson continues to be the true commercial market barometer. From our first Auction of 2019 we’ve offered almost 160 properties through our Portfolio Auctions, with an impressive success rate just north of 90%.”