Strong single bid secures Mornington industrial site

No.132 Mornington Rd, Mornington was sold at auction. Picture: Supplied

It took one strong bid to secure this coveted asset.

No.132 Mornington Rd, Mornington, was a highlight among the commercial properties sold at a portfolio auction in Melbourne for a multimillion-dollar price.

The first bid for this 1.23ha Hobart Eastern Shore industrial asset was $5.705m.

The auctioneer took instructions, and quickly declared it “on the market”.

The gavel dropped, and it was promptly sold, achieving a yield of 5.22 per cent.

No.132 Mornington Rd was brought to market by Elders Tasmania and Burgess Rawson from CBRE.

Richard Steedman and Scott Newton from Elders Commercial said the Mornington asset had attracted a lot of inquiries before selling under the hammer for a great price.

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No.132 Mornington Rd, Mornington.

No.132 Mornington Rd, Mornington.

Mr Newton said it had been held by the vendor for a long time, and leased to the State Government for 25-plus years.

“Most of the interest in the property came from locals,” he said. “And in the end it was purchased by a Tasmanian buyer.”

Mr Steedman said the property’s strong fundamentals, combined with an opportunity for the future, led to the fantastic result.

“Mornington is a tightly held area. To buy land there is a challenge as it is nearly non-existent,” he said.

“This property offered the three warehouses fully leased to government tenants, but also 5000sq m of undeveloped land.

“This gives the purchaser the opportunity to uplift the asset down the track.”

No.132 Mornington Rd, Mornington.

Burgess Rawson from CBRE partner Matthew Wright said the reappointment of the Rockliff Government, stabilising inflation, and the prospect of future interest-rate cuts have all helped to solidify confidence in the market.

“At 5.22 per cent yield, the Mornington sale was a very strong result,” he said.

“The demand for industrial properties is very high.

“This sale follows the sale of No.33 Mornington Rd, which sold in excess of $2m and achieved a 4.79 per cent yield.

“Both Mornington assets were sold to Tasmanian buyers.

“The undeveloped land at No.132 was likely a driving force behind local buyers as opposed to interstate-based investors. They saw great value in the potential for future development.”

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No.45-47 Rooke St, Devonport.

No.45-47 Rooke St, Devonport.

Meanwhile, a bank-leased asset in the north of the state was also sold successfully under the hammer.

NAB in Devonport was sold for $2.02m, reflecting a yield of 5.61 per cent.

Nicholas Bond, Elders Commercial head of commercial sales, Northern Tasmania, said No.45-47 Rooke St was extremely popular during the campaign, attracting in excess of 50 inquiries, with five groups registering to bid prior to auction.

“Investors were particularly impressed with the quality of the NAB fit-out and the strategic corner location of the site at the end of Devonport’s Rooke St Mall,” he said.

“What became apparent during the campaign was a sentiment that, despite well-publicised branch closures in the banking sector, investors were confident that retail banking and face-to-face service delivery would continue to be required in key regional population centres.

“Also top of mind for investors were the significant infrastructure projects currently planned or underway for the region, such as the Port of Devonport redevelopment and the Marinus Link funding approval.”

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Auctioneer David Scholes at the Burgess Rawson from CBRE commercial property portfolio auctions in Melbourne.

Burgess Rawson from CBRE sales executive, George Wilkinson, agreed with Mr Bond, saying the NAB investment delivered a highly sought-after tenant covenant within the sub-$2m market segment, delivering “exceptional value in this accessible price range”.

“Additionally, the strong interstate interest was evidenced by prospective parties travelling to Tasmania for in-person site inspections, demonstrating robust confidence in the Tasmanian market.”