Buyers bite back at $23m portfolio auction
The commercial real estate market has received a ringing endorsement at Burgess Rawson’s latest Investment Portfolio Auction, with buyers out in force and driving a stunning clearance rate of almost 86%.
Twelve of 14 properties sold for almost $23 million combined at the auction event at Crown Casino, in a bidding frenzy rarely seen anywhere in the market in the past 18 months, while another property sold post-auction for $6.2 million.
Burgess Rawson director Billy Holderhead says vendors who are prepared to test quality properties on the market are being rewarded.
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“They’re meeting the market head-on, and the market is responding,” Holderhead says.
“We’re pitching properties honestly and with realistic yield expectations and as a result we’ve just seen some of the best commercial property auction results anywhere in the country since late 2017.”
The Avenue vet clinic in Cranbourne North.
The appeal of medical-based properties among investors has never been stronger, with a string of assets selling impressively.
As auctioneer David Scholes said, “You can’t go online to get braces”, and buyers agreed, with a pair of orthodontist-leased properties in Melbourne’s northern suburbs both trading on yields of just over 6%.
The first – a double-fronted retail space in Caroline Springs, leased to Clear Orthodontics – sold for $1.56 million on a yield of just 6.09%.
Moments later the hammer fell at $1.451 million for another Clear Orthodontics location at Broadmeadows, while a veterinary clinic at Cranbourne North reached $975,000 on a sharp 6.13% yield.
“Medical-tenanted properties continue to be among the safest and most sought-after investments, due to the fact that those businesses will always need bricks and mortar real estate in order to service their clientele,” Holderhead says.
A childcare centre at Buderim was sold at Burgess Rawson’s latest auction.
Childcare properties continued to gather major momentum, with two Queensland centres attracting a combined 60 auction bids.
A centre at Buderim, well-located opposite a shopping centre and with another Coles-anchored centre in the works across the road, sold for $4.11 million on a 6.02% yield. Another Queensland facility at Port Douglas was won for $2.805 million, representing a 7.05% yield.
Regional hardware properties also sold strongly. A Tradelink outlet at Warrnambool in Victoria fetched $1.76 million on a 6.66% yield, while a Deniliquin site leased by major independent retailer Dahlsens sold for $902,000.
A Pakenham bakery made for an excellent entry-level buy at $500,000, on a 6.92% yield.
A major Tasmanian Government-leased property at Prospect sold after auction for $6.2 million to a Melbourne buyer.
