Clearance rates show tale of two markets

AUCTION clearance rates for commercial properties were significantly down across Australia last week compared with the same period last year, new research from RP Data reveals.

Just half of the 76 properties that went under the hammer found a buyer, compared with a clearance rate of 64.9% for 74 sites last year.

The rate tracked with the trend for all sales in the month ending May 16, where just 96 properties out of 182 taken to market sold. The successful transactions totalled $163.4 million for the four weeks.

By comparison, the total value of sales recorded in Sydney for the past quarter have increased strongly this year despite  fewer properties going to market, according to RP Data.

In the three months to the end of May there were 71 sales, worth a combined $1.53 billion, compared with 97 sales totalling $1.01 billion for the quarter to the end of February.

The November quarter recorded 92 sales totalling $906.3 million.

In the year ending May 2014, 360 commercial sales in Sydney were sealed for $4.6 billion, considerably up on the 302 sales totalling $3.17 billion for the same period last year.

Action heats up in the Sunshine State

Ten registered local bidders launched 50 bids in a scramble for four Gold Coast properties Colliers International auctioned last week.

More than $1.36 million changed hands in a market flush with buyers seeking sub-$1 million investments.

Colliers’ Stewart Gilchrist said there was “a substantial pool of purchasers with capital looking to invest in quality, income-producing commercial real estate” in Queensland, but supply was not keeping up with demand.

“Achieving the 100% auction clearance rate is a sign of significant market upturn and the strength of the Gold Coast market,”  Gilchrist said.

The 100% auction clearance rate is a sign of … the strength of the Gold Coast market.

The Colliers portfolio comprised a 100sqm ground floor Surfers Paradise shop  at 9 Trickett St, which sold for $575,000.  The Middle Eastern restaurant trading at the site on a three-year lease term plus options generates $70,000 a year.

A second retail space occupied by a dental practice  in the same building sold for $220,000. This property covers 106 sqm and generates $26,850 a year.

The last space at the same address was a fully fitted, vacant shop of 50 sqm which sold for $36,000.

The fourth property to go under the hammer for $530,000 was a 323sqm warehouse at  7 Millennium Circuit in Helensvale. It is occupied by  a film production company  on a four-year lease with a four-year option.

Melbourne industry flocks  west

Proximity to main arterials has made industrial sites at Derrimut, in Melbourne’s west, a favourite with buyers lately, according to agents Knight Frank.

Four properties in the West Park Industrial Estate, which has clear access to the Deer Park Bypass, have been snapped up by separate owner occupiers for almost $7 million in recent weeks..

A 2300 sqm office and warehouse under construction at 18 Grimes Court sold for about $2.2 million, equating to $965 per sqm. A 3000 sqm building at 20 Grimes Court sold for $2.925 million, or $975 a sqm, a buyer paid $1.4 million for a 1500 sqm facility at 43 East Derrimut Crescent and a 300sqm site at  219 Derrimut Drive sold for $320,000.

Acclaimed artist with fashion sense

Darling of the international art scene David Bromley is setting up a “concept outlet” in Melbourne’s home of high fashion in Windsor.

Fitzroys has lured the artist to 93-95 Chapel St on a 20-year term.

Details of the lease for the 900 sqm building with a 10m frontage were not disclosed.

However, rents in the precinct vary widely, ranging from around $350 per sqm for large spaces to up to $700 for boutique 100 sqm spaces.