Sydney family buys two service stations in $94.3m portfolio auction

A wealthy Sydney family spent more than $15 million on two service stations as high-net-worth investors filled up on commercial property leased to blue-chip tenants in a $94.3 million portfolio auction.

The portfolio of 17 fuel and convenience retail assets, childcare centres, fast food and large format retail outlets plus a medical centre sold for $13 million above reserve in Cushman & Wakefield’s March portfolio auction, the agency said on Monday.

Nine Woolworths Caltex service stations headlined the 19 March auction, collectively selling for $54.5 million with yields ranging between 2.9% and 5.75%.

“Seeing petrol stations sell on sub-3% yields is reflective of the market dynamics at present, as high-net-worth investors continue to target defensive assets and scour the market for higher yielding investment opportunities,” Cushman & Wakefield national director and head of investment sales Michael Collins said.

“One Sydney-based high-net-worth family spent $15.4 million on assets in Brookvale and Bulli, underscoring the value likeminded investors see in these properties,” he said.

A Sydney family paid $15.4 million for two northern beaches service stations. Picture: realcommercial.com.au/sold

“We are regularly seeing private investors bidding up these properties beyond reserve, and vendors looking for opportunities to lock in capital appreciation. It’s a win-win for both parties currently.”

Cushman & Wakefield said the Brookvale EG Woolworths Caltex petrol station sold for $8.8 million on a record low 2.89% yield. Another service station in Newport, also in Sydney’s northern beaches, fetched $8.3 million on a 3.25% yield.

Five childcare investments located in NSW and Queensland were also hotly contested, including a centre in the Brisbane suburb of Taigum bought by a Hong Kong-based investor for $8.31 million and another in Coomera on the Gold Coast that sold for $6.3 million.

Childcare centres have been in strong demand during the pandemic. Picture: realcommercial.com.au/sold

“Private investor demand for commercial real estate assets continues to go from strength to strength, extending its run in late 2020,” Mr Collins said.

He said Cushman & Wakefield’s national investment sales team has sold more than $220 million in commercial real estate assets since November, adding the size, total value and level of bidding activity has climbed significantly during its last three auctions.

There has been strong investor demand for the fuel and retail convenience sector and other essential services like childcare assets during the coronavirus pandemic.

Cushman & Wakefield associate director Tom Moreland said investor activity was expected to remain strong.

“We expect this level of activity to remain for the foreseeable future, as investors seek passive commercial opportunities backed by defensive industries, particularly those that traded well through the pandemic,” Mr Moreland said.

A highway retail centre in the NSW regional town of Bomaderry, anchored by Domino’s and Red Rooster, sold for $8.05 million on a 4.66% yield, the lowest for an asset of its kind in a regional location according to Cushman & Wakefield.

A Melbourne family paid $9.5 million, on a 4.93% yield, for an Officeworks located in Brisbane’s Aspley.

A Brisbane property leased to Officeworks sold for $9.5 million. Picture: realcommercial.com.au/sold

Mr Collins said the portfolio auction, which was livestreamed to auction rooms in Brisbane and Melbourne, was the biggest held in Sydney for some time.

The auction achieved a clearance rate of 94%, with an average yield of 4.73%.

There was also remote bidding from Hong Kong, Perth, Darwin and regional locations including Ballarat, where a local investor bought the Lucas Woolworths Caltex petrol station for $3.15 million, which Cushman & Wakefield said represented a record-breaking regional yield of 5.4%.

Cushman & Wakefield’s next portfolio auction on 29 April will involve 12 properties worth about $62 million.