Loan window widens, time is ripe for canny, cashed-up investors

There has been an uptick in lending to property investors in the second half of this year, the magnitude of which has not been seen since 2016, official figures reveal.

The Australian Bureau of Statistics says there was a 4.7 per cent increase, to $4.6 billion, in loans for investments during September – the sharpest rise since September three years ago.

Australian Prudential Regulatory Authority figures also showed a spike in lending as the financial year came to a close.

APRA reported that the value of loans to investors was 13.8 per cent higher in the June quarter than in the previous three months.

“Banks are pushing money out the door for commercial property investors,” Burgess Rawson director Raoul Holderhead said.

“Improved lending conditions are weighing in buyers’ favour and investors should take advantage of the opportunity to enter the market. The banks closed the doors this time last year, but now they’ve opened up for business.”

The insight comes as Burgess Rawson prepares to launch its final portfolio auction for 2019.

Mr Holderhead said potential investors dissuaded by tighter lending conditions in the past year or two should consider entering the commercial property market now.

Not only were lenders more generous, but the opportunities to choose from a variety of attractive asset classes before the end of the year were compelling, he said.

“We have some exciting offerings coming onto the market, including a rare opportunity to secure a Bunnings-leased property in Horsham, a booming Coles supermarket and a number of quality childcare centres.”

The listing of six childcare centres comes after a year in which the asset class has been one of the best performing in the commercial property market.

The agency first gained a reputation as a market leader in the sector in 2014, when 46 early learning centres went under the hammer in a notable Burgess Rawson portfolio auction.

“Three years later, in 2017, we co-ordinated the sale of 79 centres,” director Adam Thomas said.

“In May of that year, we sold 15 properties in 48 hours.”

Since then, the team has gone from strength to strength, selling 78 per cent of all Australian childcare properties in the past five years.

Investors interested in the early learning and childcare sector will have the opportunity to buy one or more of six such properties at Burgess Rawson’s 133rd portfolio auction, to be held at Crown Casino at 11am on Wednesday, December 11.

The childcare properties include an as-new facility in the coveted Melbourne bayside suburb of Black Rock, and a centre leased to Edge Early Learning in the Brisbane suburb of Nundah.

Other centres up for grabs include one in Ararat, in Victoria’s west, one in Innisfail, Queensland, another in Hammondville, New South Wales, and a facility in Inglewood, Western Australia.

Almost 30 properties will go under the hammer, including supermarkets, a car dealership, an auto parts retailer, fast food outlet, and fuel and convenience outlets, including two 7-Eleven stores in Queensland.

Burgess Rawson director Shaun Venables said the list was the culmination of a steadily improving commercial property market.

“The shift in conditions means that sellers are now releasing more properties onto the market,” Mr Venables said.

“Coming into the end of the calendar year, we’ve got a really nice list of quality passive assets. If you want to come to one convenient place to find a variety of quality commercial investments, there’s no better time or place than attending our next portfolio auction.”

Published in the Herald Sun.