Investors Undeterred by COVID Lockdowns In ‘White Hot’ Commercial Market
Investors have shrugged off COVID lockdowns at a $76 million auction, with a pub, Hungry Jack’s and Bridgestone tyre outlet setting records as buyers target commercial assets with long leases and strong tenants in a “white hot” market.
A record 300 registered bidders from across Australia lodged 738 bids during Burgess Rawson’s Melbourne portfolio auction on Tuesday, which was conducted remotely due to the city’s COVID lockdown.
Burgess Rawson national director Raoul Holderhead said the properties sold for a combined $76,516,000 – $7.9 million above reserve prices – and several record yields were achieved, despite many investors bidding sight unseen on properties due to COVID restrictions.
Mr Holderhead said demand was outstripping supply by a ratio of 12 to one.
“The market’s white hot and quality property is going to get super results,” Mr Holderhead said. “I’ve been doing this for 20 years. I’ve never seen anything like it.”
While demand for essential service or “COVID-proof” properties has been at record levels, Mr Holderhead said the range on offer in Burgess Rawson’s portfolio auctions showed investors are targeting quality assets and tenants with a strong credit rating who are unlikely to default on their rent payments.
“At the end of the day, we’ve pretty much got what investors are after and that’s quality real estate, AAA tenants with super lease documents and long-term tenure.
“That’s what investors are after and that’s what the banks want to lend on.”
Bidders from every state bid on properties located in Western Australia, South Australia, Victoria, Tasmania and Queensland.
Mr Holderhead said almost 10,100 people watched the auction online on Tuesday.
It followed Burgess Rawson’s Sydney portfolio auction a week earlier, when 16 of 18 properties sold for a combined $42.2 million in a remote auction during Greater Sydney’s prolonged lockdown.
Burgess Rawson’s next portfolio auctions will be held on 28 and 29 September.