One Third of Commercial Properties Sell Ahead of Burgess Rawson Auction Day

Commercial assets deemed to be COVID-proof have smashed records at the first major investment portfolio auction of the new financial year.

With regional Australia hitting new heights of popularity as a result of the pandemic, and with properties providing essential services like fuel, medical support, pharmacy items, groceries, childcare and fast food in high demand, many reached prices – and yields – that no one had expected.

“It used to be that everyone was after assets that were recession-proof,” said Burgess Rawson director Darren Beehag after the company’s massive August online auction of 18 commercial properties from the Sydney Opera House on Tuesday – of which six were snapped up pre-auction. “But now it’s the properties that are COVID-proof.

“They’re all proving very, very popular,” he said. “We had so much demand from all over the country for these properties, and so much demand before to take them off the market too. These auctions are working so well online now. I think buyers are feeling very comfortable about them, even when they’re in lockdown.”

More than 100 potential buyers registered before the auction, either online or in person at Burgess Rawson offices across the nation, paying a deposit of $10,000 each in order to bid. There was then often fierce competition between up to 11 keen purchasers before the hammer came down on 16 of the 18 assets, a success rate of 89 per cent, for $42.2 million worth of property – $2.4 million above reserve.

The best seller was a Rise & Shine Childcare centre in Sylvania, in Sydney’s south, which sold for $9.4 million on a national record yield of 3.7 per cent. Another childcare centre, the G8 Education Childcare Centre in Dubbo, NSW, sold for $2.032 million on a 4.76 per cent yield, and a third, Wonderschool Early Learning in Phillip, ACT, sold for $9.895 million on a yield of 5.21 per cent.

Fast food, another asset considered a big COVID hit, also fared well at the auction. A KFC in Tumut, NSW, was sold for $2.63 million with a 4.39 per cent yield. “I think liquor and fast food have proved good investments throughout COVID,” said Mr Beehag.