Written by Adrian Ballantyne, Real Commercial
Smaller commercial property investors are diving back into the market early in 2018, with solid results at Burgess Rawson Melbourne’s first portfolio auction of the year.
Two thirds of the properties up for grabs at the commercial agency’s Melbourne auction on Wednesday found new owners, headlined by the $8 million sale of a United petrol station in Townsville and heated competition for a Ballarat retail store leased to charity group Vinnies.
More than $17.6 million worth of property was sold at the Melbourne auction, signalling strong intent from mum-and-dad investors, with many of the properties priced around $1 million or less.
Last week 12 out of 15 properties sold at Burgess Rawson’s first Sydney auction of the year, for an 85% clearance rate.
The United service station traded on a 6.25% yield and made up almost half of the auction’s bottom line, but is was the Ballarat Vinnies store that really caught bidders’ attention, with 54 individual bids seeing the price soar to $945,000 and the yield shaved to 5.29%.
Elsewhere, a Springvale property leased to car parts retailer Repco sold for $1.57 million on a 5.6% yield, while a Pet Stock store and doggy day care centre went for $2.505 million on a 5.35% yield.
Burgess Rawson CEO Ingrid Filmer says the auction results are a strong sign of what’s to come this year.
“Today’s results reflect investor appetite for commercial property, both in strong metro growth areas and key regional hubs of Victoria – setting a strong benchmark for the year,” Filmer says.
“Retail properties were the best performers of the day, with a number of high profile tenancies having strong investor appeal, with results that were, on average, just under 20% above reserves.”
Also sold on the day was a NAB at Leongatha in Victoria’s Gippsland region, which went for $1.385 million on a yield of more than 7%, while a nearby cafe and restaurant was picked off for $666,000.
The next Burgess Rawson auction will be held in four weeks.