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An inflated cash rate hasn’t stopped investors from engaging with high-quality property, if the latest Burgess Rawson auction results are anything to go by.
The agency group has reported $84.6 million in sales and a clearance rate above 90 per cent at the latest instalment of its national portfolio series.
A total of 32 properties were taken to auction, which were supported by an average yield of 5.61 per cent.
According to Burgess Rawson chief executive Ingrid Filmer, the latest results showcased “consistent and competitive bidding in every capital city”.
She highlighted how higher registrations, clearance rates, and bidding numbers demonstrate “the underlying strength of the investor market”.
With the Sydney Opera House acting as the backdrop to the harbour city’s auction action, the agency reported a 100 per cent clearance rate, with more than $17 million worth of commercial property being exchanged — including an $11 million ACT industrial asset, and the divestment of a Coffs Harbour freehold medical investment, which sold for just higher than $2 million, and generating a 5.37 per cent yield.
Kieran Bourke, a partner with the firm, said investors are now hunting for strong, passive investments that “demonstrate secure long-term income streams”.
From his perspective, medical investments are great examples of this — thanks to the stability they provide, explaining how “providers [are] wedded to their location due to the long-term nature of their clients and the essential services they provide”.
Down in Melbourne, the success continued.
The Victorian capital saw more than 150 registered bidders competing for 20 properties, delivering a 95 per cent clearance rate with an average yield of 5.38 per cent.
Fellow partner Shaun Venables said the latest yield results were a slight softening on earlier September results. Even so, “the underlying strength of the commercial property market is continuing to make its presence felt”.
He said: “Purchasers are out to buy, and vendors are meeting the market. The level of active bidding was the highest we’ve seen this year, particularly for fast-food investments.”
While assets were available across a wide range of sectors, fast food was responsible for the highest value sale of the day. A Beaconsfield was acquired by a private investor for $5.45 million on a yield of 4.4 per cent, while a nearby Taco Bell outlet also found new owners for $3.82 million on a yield of 4.58 per cent.
Mr Venables said that fast-food outlets had held firm — and seen intense bidding — thanks “due to both a lack of stock and investor appetite”.
Brisbane’s line-up was just as varied as its more southern counterparts: An industrial facility in rural locality Emerald sold for $2.1 million, while a Burpengary East found a buyer at $765,000.
Elsewhere, an EG service station was divested for $1.42 million.
All up, the results over the three days give the rest of the market a great indicator of demand, according to the group — even in spite of the inflated cash rate.
Beau Coulter, another partner with the group, outlined that since June 2022, “the average Burgess Rawson Portfolio Auction yield has compressed 102 basis points to 4.86 per cent”.
That’s despite the cash rate having risen 150 basis points in the same period.
“We think this is amazing, and our hard-working agents deserve all the thanks for their trusted advice and dedication they put into marketing each one of these properties on behalf of our valued clients,” Mr Coulter said.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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