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A total of $102 million worth of commercial properties were snapped up during Burgess Rawson’s latest auction campaign across three major capital cities, indicating that investor confidence in the sector has continued to be strong.
The real estate and business broker’s three-day portfolio auction — which was held across Sydney, Melbourne and Brisbane and featured a broad selection of commercial properties — saw a total clearance rate of 81.82 per cent.
Achieved yields across properties signed off ranged from 4.4 per cent at the lower end and 6.05 per cent at the higher end, with the tabulated average yield recorded at 5.52 per cent.
The auction’s Melbourne leg boasted the strongest results, with a clearance rate of 91 per cent and a total of $50.346 million worth of property being exchanged.
Sydney’s auction series also delivered solid outcomes, with nine of the 12 properties presented at the NSW capital changing hands — adding up to a total of $31.474 million worth of transactions completed.
Burgess Rawson closed out the August campaign in Queensland, where 10 properties were presented and 70 per cent were cleared under the hammer. In total, Brisbane racked up $21.15 million in sales.
Commenting on the results, managing director (Queensland) and partner at Burgess Rawson Adam Thomas said: “Confidence is still certainly high, and investors are actively looking to deploy surplus capital into proven sectors.
“There’s a definite shift in buyer profile and we’re seeing sophisticated private investors chasing quality, and certainty, without the usual competition from larger institutions.”
Burgess Rawson’s head of agency in NSW, Yosh Mendis, said that while appetite for commercial properties remained robust, there was an observed shift in preference for particular assets.
“Especially in the essential services sectors, such as childcare, service stations, fast food, non-discretionary retail and government leased investments,” he disclosed.
Burgess Rawson’s Shaun Venables stated that auctions in Queensland saw the same trend. He commented that more investors are now expanding their ventures, citing the notable sale of a hotel in the township of Dinner Plain, which exchanged hands under the hammer for $1.28 million for a yield of 5.53 per cent — a new record for a commercially leased property in an alpine region.
“Alpine regions are becoming year-round destinations, rather than seasonal, which is driving greater investment. This, together with a lack of available land being released, is increasing the value of established commercial properties,” he stated.
Mr Mendis gave his forecast on which properties have a bright outlook in the coming months. “Freehold assets like the retail centre in Bongaree, with national tenants including NAB, The Coffee Club, and an established medical centre, will continue to perform well in this market,” he said.
The notable auction sales throughout the tristate campaign were:
NSW
- Woodcroft – Early Learning Centre leased to Young Academics ELC for $2.70 million with a 4.51 per cent yield
- Port Macquarie – Building leased to Property NSW for $4.23 million with a 4.28 per cent yield
- Cessnock – 7-Eleven service station leased at $6.4 million
- Coffs Harbour – Mobil outlet leased at $5.28 million with a 5.5 per cent yield
Victoria
- Epping – Augustus Gelatery outlet leased for $910,000 with a 4.40 per cent yield
- Pakenham – Supermarket asset class and fruit and vegetable market asset class leased for $2.38 million with a 4.61 per cent and 4.71 per cent yield, respectively
- Dinner Plain – Hotel leased for $1.28 million with a yield of 5.53 per cent
Queensland
- Bongaree – Mixed-use retail and commercial property leased for $7.2 million with a yield of 5.76 per cent.
- Woree – Multi-tenanted freehold investment property leased for $3.4 million with a yield of $5.91 per cent
- Fortitude Valley – Two McWhirters building retail tenancies leased at $2.7 million and $975,000, for yields of 5.75 per cent and 6.05 per cent, respectively
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