Huge auction line-up to end 2020
Prime essential service, fuel and convenience assets will headline Burgess Rawson’s final Melbourne Portfolio Auction for 2020 on 9 December.
Director Raoul Holderhead said the auction is the largest since the pandemic was declared and will conclude a resilient year for commercial property, especially essential service investments like fuel, convenience and fast food.
“We are certainly ending the year on a high note,” said Mr Holderhead. “With restrictions easing in Melbourne, we can once again hold the auction at Crown and offer a first-class line up of properties.”
The December portfolio of 20 properties includes a diverse mix of essential service and convenience retail investments including two Melbourne 7-Elevens, a new drive-thru Starbucks, a thriving Red Rooster restaurant, a new Bridgestone outlet, four childcare centres, a VicRoads and a Commonwealth Bank.
Price expectations for these hero properties range from $1.7 to $7 million and the overall portfolio is expected to total over $65 million.
“The calibre of this portfolio is exceptional,” said Mr Holderhead. “Many of these properties are newly constructed, with new, long-term leases and strong rental returns. It really is a premium line-up.”
Mr Holderhead added that the timing couldn’t be better in terms of demand for essential service and convenience retail investments; as evidenced by 56 unsatisfied bidders for similar properties over the last 24 hours.
“Buyers are adjusting their budgets dramatically, mid-auction, based on the lack of return on cash in the bank, the derth of supply and depth of competition,” said Mr Holderhead. “We had one case today where a Melbourne-based family bid 15% above there ‘hard-and-fast limit’.”
The announcement follows a 90% success rate at Burgess Rawson Melbourne’s most recent 140th Portfolio Auction campaign held on October 28.
Three childcare investments sold prior and six properties sold at auction with a combined value of $32,611,000.
Highlights included the sale of a 7-Eleven in Penrith, NSW for $4.95 million, which was more than $1 million over reserve.
A Subway in Leongatha also attracted strong interest, selling for 21% above reserve on a yield of 4.48%.
“These results speak volumes for the strength of the sector, demonstrating that it has remained relatively immune to the impact of COVID-19,” said Mr Holderhead.
“It must also be said that the easing of restrictions in Melbourne has generated a renewed sense of optimism. As soon as the announcement was made, auction registrations increased dramatically and, today, the bidding was fast and competitive.”
Burgess Rawson has been the most active freehold sales team during COVID-19 with a strategic focus on essential service properties.
“Without a doubt, commercial property has been the investment class of choice during such disruptive economic conditions,” said Mr Holderhead. “Investors are diversifying their portfolios to include investments with defensive qualities like retail fuel, convenience and fast food.”