Melbourne commercial Portfolio Auctions reel in $38m

Thursday 26 February 2015

Written by Nelson Yap, Property Review Australia

Buyers have brought out their chequebooks for the first major commercial property Portfolio Auction in Melbourne this year.

The Burgess Rawson Melbourne auctions saw 20 properties listed but two were withdrawn prior to auction and ultimately 18 properties went under the hammer, and 15 were sold for a $38,236,000.

The most anticipated offering was a car dealership at 100 Cooper Epping, which an investor drove off with for $9,300,000. The 2,067 sqm building is leased to Bayford Group on a three-year term plus options to 2027, on a net rent of $630,035 p.a. The property occupies a 9,268 sqm site with quadruple street frontage and is located opposite Epping Plaza shopping centre.

The auction was dominated by regional property investment offerings.

A Bendigo Bank property at 581-583 Napier St Bendigo sold for $3,830,000. The 775 sqm building set on a 2,515 sqm site, is leased to the bank on a 20-year lease to 2026 plus options through to 2046, returning $235,115 p.a.

Two properties at 71-73 Midland Hwy Bendigo were also sold. Lot 1 fetched $1,652,000. The 700 sqm retail showroom is leased to retailer RSEA on a 10-year lease to 2018 plus options through to 2033 at $98,013 p.a. There is also on-site parking for up to 46 cars.

Lot 2 is a 66-place childcare facility and sold for $1,706,000. The property is leased on a brand new 15 + 10 + 10 year term to 2050 for $100,000 p.a. The 500 sqm building occupies 16 on site car spaces and sits on a 1,957 sqm site.

In the Victoria and New South Wales border town of Barooga, a childcare centre sold for $1,365,000. Located at 47-51 Takari St, the 500 sqm building holds 66 licensed places and occupies a 1,957 sqm site. There is also 16 on site car parking spaces. The property was sold with a brand new 15 + 10 + 10 year lease to 2050 and currently returning $100,000 p.a.

A 1,265 sqm drive-thru bottle shop on a 1,272 sqm site at 96 Mclennan St Mooroopna sold for $1,870,000. The property is leased to Fishers a 10-year term to 2021 with no further option. It currently returning $142,603.18 p.a.

At 102-104 High St Shepparton, a 377 sqm building on a 474 sqm site sold for $1,065,000. The property is leased to Optus World shop to 2018, no further option and currently returning $85,303 p.a.

At 179-185 St Kyabram, a Target store sold for $2,010,000. The property comprises a two-level 1,271 sqm building, which is leased to Target on a 10 + 5 + 5 year lease to March 2034 with the retailer paying $140,000 p.a.

Aside from the Epping car dealership, there only three other offerings in metropolitan Melbourne.

At 246 Boundary Rd Braeside, an ANZ Bank branch sold for $1,815,000. Purpose built for the bank, the property comprises a 374 building over two levels with 28 on-site car parks on a 1,505 sqm site. ANZ signed a new five year plus options to 2028, paying all outgoings including Land Tax and a rent of $90,000 p.a.

A pub and Melbourne Racing Club operated venue at 59 Grant St Bacchus Marsh sold for $4,025,000. This was the first time the property was offered for sale in 50 years. The 1,415 sqm property comprises 40 gaming machines, large bistro, sports bar, upstairs function room and a beer garden. It was sold with a five-year lease with options to 2037 with fixed 3.5% increases. The Melbourne Racing Club, which operates 13 other venues, is paying $268,419.38 p.a.

An IGA supermarket-anchored centre at 287 Boronia Rd Boronia sold $4,303,000. The complex comprises additional two retailers including Nandos plus 40 car parking spaces on a 2,809 sqm site. The three tenants pay total rent of $344,868 p.a.

There were two properties from Tasmania, At 6 Reiby St Ulverstone, 15km west of Devonport, a 94 sqm building sold for $275,000. It is leased to sandwich chain Subway on a rental of $20,000 p.a.

At 15-27 Murray St East Devonport, a retail complex sold for $955,000. The 1,112 sqm centre comprises nine shops and 2 ATMs on a 2,400 sqm site. It is currently returning $89,182 p.a. and has the potential to yield $110,000 p.a. on a fully let basis.

Two Queensland properties capped off the auctions. A Woolworths supermarket at 1 Youngs Crossing Rd Joyner sold $2,460,000. The 2,268 sqm property is leased to Woolworths on a brand new 15 year lease plus 4 x 5 year options to 2049, returning $118,528 p.a.

Finally a 216 sqm building leased to Kirin Group at 61 – 63 Beor St Port Douglas fetched $1,605,000. It was sold with a 10-year lease from January 2014 plus options to 2034, returning $149,870 p.a.

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