Share rout tipped to boost property interest

Commercial property buyers should prepare for extra competition at auctions as investors seek out stable assets in light of the share market volatility likely to persist over COVID-19 pandemic fears, an agency warns.

The historically large sell downs across the world’s stock exchange this month signal that investors are looking for reliable places to park money, according to Burgess Rawson managing director Ingrid Filmer.

“Put simply, money is flowing to property, especially towards commercial assets,” Ms Filmer said.

“Unlike with shares, where global events can trigger algorithms to automatically sell stock, property is less susceptible to short-term fluctuations in market conditions.

“Australians have a love affair with bricks and mortar. We cling to our tangible assets and in times when stock markets have become unpredictable, property looks particularly attractive.

“This is especially the case with quality assets… the best commercial property stock will always perform and sell well.

“At Burgess Rawson, our iconic portfolio auctions offer a strong selection of investments.

“Investors take comfort in the strength of blue-chip commercial tenants with long, secure leases, particularly those with annual rent increases locked in.”

Ms Filmer said secure tenancies were a huge driver of competition, as evidenced by the performance of the hardware sector last year, where clearance rates were above 90 per cent and metropolitan yields averaged a slim 4.8 per cent.

More recently in February, Burgess Rawson achieved a 100 per cent success rate with the sale of 18 7-Eleven outlets on an average yield of less than 5 per cent.

It followed the October auction of 15 of 7-Eleven’s fuel and convenience sites, which also achieved a 100 per cent clearance rate.

“There’s more in store at our next portfolio auction, with a string of assets tenanted by household names such as Repco, Coles Liquorland, Centrelink and more,” Mr Filmer said.

“We are regarded as the market experts on childcare centre transactions and next month we are offering a number of these assets.”

Up for sale is a centre leased to Sparrow Early Learning with triple street frontage and directly opposite Tarneit shopping centre, another is leased to Woodlands Early Learning in fast growing Truganina and a brand new, purpose-built facility in Hilbert, Western Australia, is also being auctioned.

“The key theme to all these assets in that they are in suburbs experiencing phenomenal growth,” Mr Filmer said.

“Areas such as these will need childcare facilities well into the future as they continue to expand and welcome new residents with children.”

Also among the highlights of the next portfolio auction are Williamstown icon The Stags Head Hotel and Ballarat late-night venue The Bluestone, along with a number of United, Liberty and Shell fuel outlets leased to industry giant Viva Energy Australia.

Burgess Rawson will conduct its next portfolio auction at Crown Casino from 11am on Wednesday April 1.

Published in the Herald Sun

Share

Stay up to date with our latest portfolio auctions & insights