Auctions show no sign of post-Budget blues

Last week’s federal Budget contained more good news for investors than bad news.

The lack of budgetary stumbling blocks for those wanting to spend on commercial property was evident in the bumper result achieved at the Burgess Rawson portfolio auction the day after Treasurer Joe Hockey delivered his maiden ledger for the coming financial year.

Sales at the Melbourne auction on May 14 came in 46% higher this year to total more than $35 million,  compared with $24 million at last May’s auction.

More than 300 people attended the event, held this year at the Crown Conference Centre instead of its traditional venue at Crown’s River Room.

In addition to those turning up to the temporary venue interstate phone bidding kept the proceedings busy, according to agent Billy Holderhead.

“Phone transactions via affiliated offices in Perth, Brisbane, Launceston, Hobart and Sydney provided significant windfalls for vendor clients, with interstate investors purchasing four of the 12 properties sold,” Mr Holderhead said.

Highlights of last week’s sales included: the five-level office at 360 Little Collins St, Melbourne, which sold immediately after auction for $1 million above pre-campaign expectations at $11.5 million. The deal recorded an  initial yield of 5.37%, thanks to anchor tenants Gills Diner and Benjamin’s Jewellers. The successful bidder was a private West Australian based investor.

Hammer down on Bunnings warehouse

A NSW private investor paid almost half a million dollars above the reserve for the Bunnings warehouse freehold at 9-10 June Court, Warragul.

The final price of $5.57 million reflected the new owner’s attraction to the property’s eight-year lease guarantee with the Wesfarmers’s hardware subsidiary, Burgess Rawson director Raoul Holderhead said.

A 781 sqm shop opposite a new Coles supermarket in Spring Square, Hallam, also sold with an eight-year lease to a Wesfarmer’s division, this time it was Liquorland.

“A Sydney buyer  trumped the locals with just his second bid – $1.26 million – reflecting a yield of 5.79%,” agent  Jamie Perlinger said.

“It was the second Liquorland-leased freehold he’s bought through our auctions in just 14 months.”

Davenport building draws national attention

The Federation-era building at 52 Steele St in Devonport, Tasmania sold at the auction for $1.28 million, which was more than 20% above the reserve.

The property is tenanted by a childcare operator on a new 10-year lease with a further two five-year options.

Bids rolled in from Sydney, Brisbane and Perth, in addition to Hobart and Launceston.

A healthy 4.91% yield was achieved with the $1.05 million sale of a café on the corner of Pratt and Young Streets in Moonee Ponds.

“Feedback from buyers throughout the campaign was that this strata-titled 73 sqm property was almost future proof, being directly opposite one of Melbourne’s largest Woolworths supermarkets and its 343 car spaces,” Mr Raoul Holderhead said.

The next Burgess Rawson Portfolio Auction will be held in Melbourne on 25 June and will feature many sites securely leased to major blue-chip companies.

Among the tenants trading from the properties going under the hammer are: Woolworths, Coles, Westpac Bank, Centrelink/Medicare, Affinity Education Group (ASX-listed), Domino’s Pizza (ASX-listed), IGA and Australia Post.

Canberra building fetches $25.8m

Investec Australia Property Fund has paid $25.8 million for the four-level Manning Clarke building in Canberra.

The 5403 sqm property is leased to the federal Department of Human Services until 2023, and includes 158 car spaces.

A yield of 7.84% was recorded for the transaction.