Tasmania delivers bang for commercial property buck
When it comes to commercial property statistics, Tasmania often appears to be decidedly persona non grata.
Rarely, if ever, does Australia’s most southern state feature in commercial reports and analysis, despite anecdotal evidence of a buoyant market and comparatively strong sales results.
But they do sell commercial property there.
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Agency Burgess Rawson alone sold 14 properties across the apple isle last year, including a Moonah shopping centre in conjunction with Knight Frank for $14.2 million and a Woolworths supermarket in George Town for almost $5 million.
Burgess Rawson director Jamie Perlinger says investors are increasingly casting their eyes across Bass Strait in search of strong returns.
“Almost every portfolio auction we run now includes offerings in Tasmania,” Perlinger says.
“Compared to, say, Melbourne or Sydney, Tasmanian assets often have a better risk profile than some of the larger markets and returns across the board in Tasmania are higher than the capital city averages so many of our clients, especially from Victoria, like to send some money across the Tasman into cities like Devonport, Launceston and Hobart.”
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There will be more Tasmanian stock on the table as the agency prepares to hold its first portfolio auctions of the year in Sydney on Tuesday, February 23 and Melbourne Wednesday, February 24.
At the top of many investors’ shopping lists will be a Woolworths supermarket in Burnie, which is to be sold via an expressions of interest campaign that closes on March 6.
The 4000sqm store on Mount St sits on an 11,000sqm site and includes 200 on-title car spaces, as well as a new 20-year lease with options through to 2051.
Burgess Rawson director Graeme Watson says the supermarket returns an annual net income of $1.236 million and is expected to fetch $17.5 million.
Tasmanian assets often have a better risk profile than some of the larger markets
“Not only is the supermarket said to be the highest performing in the state, it is well up there on a national level in terms of performance also. It has been so for years, with consistent and well above average rental sales and rental growth,” Watson says.
Over in Devonport, the agency is selling a Best & Less storethat has traded in the popular Rooke St mall for more than 20 years, as well as a pair of showrooms leased to Petbarn and Newmans Home Furnishings.
The Best & Less store features 1360sqm of retail space spread over two levels and returns annual rent of more than $161,000. Perlinger expects the property to sell for around $2.1 million at auction, which would represent a 7.5% yield.
Also going under the hammer will be a 1381sqm retail and office complex in Launceston, with tenants including the ASX-listed Skilled Group, Air Liquide Healthcare, BFA Finance and JMG Engineers & Planners. Its total rental income is more than $131,000 annually and it includes 18 on-title parking spaces.