‘Essential Services’ Raise $42m in Remote Auction
A remotely held auction of childcare centres, petrol stations, pharmacies, medical centres and takeaway restaurants generated $42.2 million of sales and a clearance rate of 90 per cent as investors showed enthusiasm for “essential services” real estate that has traded throughout lockdowns.
Due originally to take place at the Sydney Opera House, Tuesday’s event was converted by agents Burgess Rawson into a virtual one that also allowed bidding via phone.
Of the 18 properties offered for sale, eight sold prior to auction, while eight sold under the hammer and two were passed in. The auction of a small number of properties was postponed.
Childcare centres, which have remained open during Sydney’s lockdown, were standout assets, generating sales of more than $21 million.
In Sylvania in southern Sydney, a Rise & Shine childcare sold for $9.4 million on a record low yield of 3.7 per cent, according to Burgess Rawson.
The 116-place facility on a 2564 sq m Princes Highway landholding sold with a lease in place until 2026.
In Canberra, a childcare centre on Furzon Street in the Woden Town Centre sold prior to auction on a yield of 5.2 per cent and with a 20-year lease in place.
A Dubbo childcare centre leased to ASX-listed G8 Education sold under the hammer for $2.032 million on a yield of 4.8 per cent.
“Investors are now well accustomed to online and phone bidding so moving to a remote auction really was ‘business as usual’, which is reflected in the outstanding results,” said Burgess Rawson director Darren Beehag.
He said the lockdown was a timely reminder for buyers about the benefits of essential service investments.
“They can still trade and pay their rent,” Mr Beehag said. “A lack of freehold investment supply in NSW also drove fierce competition.”
Among the standout results achieved, a United service station with a Pie Face outlet in Tamworth sold for $5.02 million on a yield of 4.7 per cent, while a KFC takeaway in Tumut in the NSW Riverina leased to ASX-listed operator Collins Foods sold for $2.63 million on a yield of 4.4 per cent.
A Pacific Furniture store in Ulladulla, a coastal town about 230 kilometres south of Sydney, sold for $1.3 million on a 3.96 per cent yield and a medical investment in Canberra sold for $1 million on a 4.7 per cent yield.
Burgess Rawson said there were 102 registered bidders and a strong mix of phone and online bids received from buyers. Reserves were exceeded by a combined $2.4 million.
The agency said demand outstripped supply by six to one.