Investors splurge over $100m at commercial auctions

Commercial,Portfolio AuctionsThursday 27 October 2016

Posted by Liz Jordan, Australian Property Journal

Investors continue take advantage of the low interest rate environment, splurging more than $100 million in Sydney and Melbourne this week.

The Burgess Rawson Portfolio Auctions netted 17 sales in Sydney and 19 in Melbourne.

David Scholes of Auctionworks handled the Portfolio Auctions on Tuesday and Wednesday respectively.

Of the Sydney Portfolio’s 31 offerings, 17 sold under the hammer and the Melbourne Portfolio netted 19 sales from the 26 properties offered.

The Sydney auctions were headlined by a large-format retail and showroom offering at 12-20 Edward Street in Wagga Wagga, which sold for $7.8 million. Leased to the Good Guys, Petbarn and BCF the 5,778sqm site returns $585,000 per annum plus GST.

It was backed by two of the seven, United petrol stations offered over the two days, with brand new triple net leases to 2036 and options until 2056.

The 262-272 Victoria Road site in western Sydney’s Rydalmere of 2,842sqm returns $220,000 per annum and sold for $5 million, whilst the 4,000sqm site at 81-87 Bells Line of Road, North Richmond $300,000 per annum fold for $5.52 million.

Another service station, at 163-165 Parramatta Road in Haberfield, sold for $4.8 million with a 5+5+5-year lease to Metro Petroleum returning $288,000 per annum plus GST.

A 1,402sqm North Parramatta corner site at 31-33 Iron Street purpose-built for a childcare centre sold for just under $4 million, with a 10-year lease to 2024 with options and returning $206,448 per annum plus GST.

Other Sydney sales included:

  • 415 Terrigal Drive, Erina, for $2.62 million – 2,005sqm site fully-leased to Erina Medical Centre returning $160,000 per annum plus GST
  • 1/93 Johnson Street, Byron Bay for $1.54 million – leased to Domino’s Pizza until 2019 with options
  • 63-69 Pine Avenue, Leeton for $965,000 – 1,012sqm site leased to ANZ bank until 2018 with options
  • 137 Maitland Street, Narrabri for $880,000–ANZ bank on a main street corner site
  • 179 Adelaide Street, Maryborough for $1.085 million – Bank of Queensland branch on 928sqm main street corner site
  • Lots 1 & 2, 11-13 Pearl Street, Kingscliff for $1.39 million – CBA bank branch with double frontage
  • 94 New England Highway, Muswellbrook for $2.655 million – Supercheap Auto site leased until 2021 with options, returning $185,067 per annum plus GST
  • 18-20 Induna Street, South Grafton for $1.1 million – 5,165sqm site with 1,161sqm building area leased to Cummins
  • 71 Heber Street, Moree for $910,000 – leased to Wayne’s World on a new 10-year lease with option
  • 116 Dangar Street, Armidale for $900,000 – 974sqm site anchored by Sports Power
  • 295 Murray Street, Finley for $1.1 million – Caltex site leased until December 2017 with options until 2042
  • 252 Woronora Road, Engadine for $2.065 million–childcare site with a new 10-year lease and options until 2041The biggest sale price of the Melbourne portfolio offering was delivered by a Sparrow Early Learning centre in Tarneit at $5.13 million, which also delivered one of the day’s tighter yields of 5.42%

This was followed by another childcare offering, Jenny’s Early Learning Centre in Bendigo’s Epsom, which sold prior to auction for $5.05 million on a 6.41% yield.

A Dinner Plain Retreat and Spa at 125 Big Muster Drive on Mt Hotham sold for $4.8 million, with a 15-year lease to 2022 and options until 2032 returning $832,936 per annum, with the purchaser securing the site on a rather handsome yield of 17.26%.

The 3,000sqm G8 Education site in Werribee at 80-88 Ballan Road sold for $4.75 million, with a lease until 2020 with options and returning $279,125 per annum net.

Three of the United petrol station offerings returned the next three highest sale prices. The Narre Warren site at 25-31 Cranbourne-Narre Warren Road sold for $4.26 million at 5.9%, whilst two Tasmanian sites, at 353-357 Argyle Street, Hobart North and 7 George Town Road in Launceston sold for $3.751 and $3.75 million respectively.

A Subway outlet at 3-5 Queen Elizabeth Drive in Rockhampton sold for $1.805 million and in the process sold for the lowest yield of the offerings at 4.98%, with the next tightest return at 5.14% from a 2,096sqm G8 Education site at 17 Approach Road Banyo in Brisbane’s northern suburbs.

Next was a 1,575sqm Reece Plumbing site at 374-376 Ogilvie Avenue (Murray Valley Highway), which sold for $1.405 million on a 5.33% yield.

The other Melbourne portfolio sales include:

  • 135 Main Street, Pakenham for $1.21 million, on a 5.58% yield – butcher with dual main street frontage
  • 33 Victoria Street, Warragul for $2.92 million, 5.90% – 1,156sqm Harvey Norman site
  • 11 Fletcher Road, Bethania for $1.93 million, 5.90% – 2,208sqm site with near-new 500sqm building, leased Bridgestone until 2023 with options until 2043
  • 2 Nesbit Street, Southport for $2.92 million, 5.99% – leased to childcare provider Affinity Education on a 20-year deal until 2032 with options to 2042
  • 14 Crest Street, Beenleigh for $3.3 million, 6.54% – 1,879sqm Cubby Care Early Learning Centre site leased until 2031 with options to 2051
  • 1/103 Lewis Road, Knoxfield for $1.18 million, 6.65% – corner building occupied by Aloe Vera of Australia
  • 4-6 Autumn Place, Doveton for $1.85 million, 6.94% – 725sqm building leased to Foodworks on a 5+5+5-year deal until November 2030
  • 16-26 Campbell Street (Pyrenees Highway), Ararat for $2.7 million, 7.81% – 7,945sqm site with 2,768 building, leased to longstanding tenant Mitre 10 until 2023 with options to 2038
  • 73 Percy Street, Portland sold for an undisclosed amount – 579sqm site with 24-metre frontage leased to Guardian Pharmacy until 2020 with options until 2050