Cashed up investors snap up prized assets at Burgess Rawson’s portfolio auction event
Burgess Rawson’s Portfolio Auction 162 saw almost $85 million in sales and an average yield of 5.31% across the three day event.
A laundromat near Melton in Melbourne’s outer western suburbs attracted 115 bids and a dental surgery in Ballarat sold 23 per cent above its reserve at a packed commercial property auction.
Ingrid Filmer, CEO of Burgess Rawson said many buyers had sold out of the residential investment market and were paying with cash for commercial assets generating much higher returns on long leases.
‘‘We know they are cash buyers because they are settling within 30 days and some were buying through self-managed super funds,” Ms Filmer said.
Fast food was high on the menu with a McDonald’s outlet on Princes Highway, Unanderra selling for $5.75 million, reflecting a strong yield of just 3.51%
Two Guzman y Gomez restaurants also sold with one in Unanderra selling for $5.73 million (4.45% yield) while the asset in Plunkett Street, Nowra sold for $6.03 million reflecting a yield of 4.55%.
Early education was sought after with Story House in Putney selling for $5.71 million, showing a return of 3.51%.
Strong results were achieved for entry-level assets as well with a medical investment in Kincumber selling for $1.395 million providing a return of 4.6%.
The laundromat in Cobblebank, a new Melton suburb, was offered with a 10-year lease to the Blue Hippo chain, which has 24 stores across Victoria. It eventually sold to a local investor for $741,000 on a yield of 4.7 per cent 16 per cent above its reserve price after eight parties registered to bid.
Two other properties in the same Cobblebank complex – a face, skin, and hair treatment lounge and a cafe – sold under the hammer on yields below 5.5 per cent.
A Red Rooster in Warwick, Queensland sold for $1,705,000 showing a yield of 5.49%.
“Premium properties on secure, long-term leases to multi-national and global brands will always be highly contested,” Ms. Filmer said.