This article is from the Australian Property Journal archive
SIX groups have competed for 10 shops in Gisborne, more than 50 kilometres north of Melbourne, which sold under the hammer for $6.15 million.
Atlanta Sands Pty Ltd divested Gisborne Square through CBRE’s Rorey James, Mark Wizel, Justin Dowers, and Kevin Tong.
They said the yield of 5.3% in a regional location, with no major tenant acting as an anchor, indicated robust demand remains for retail assets with strong fundamentals.
“We had six groups competing from the $4.9 million opening bid all the way through to the final bid by a Melbourne based investor at almost $6,000 a square metre on the building.”
Located on the corner of Hamilton St and Brantome St, Gibson Square has a gross lettable area 1,068 sqm over the 10 stores and 90 metres of street frontage, on 2,031 sqm of land with 69 ground and rooftop car parks and street parking.
The property sold fully leased with an annual net income of more than $329,000 with fixed yearly increases.
Wizel said Atlanta Sands had gained a 65% premium having purchased the property in 2015 for $3.725 million.
The sale price reflected a sharper yield and double the land and building rate achieved four years earlier for the Foodworks supermarket, which had sold to an investor from China for $7 million on a yield of 6.05%.
Strong local population growth, yield, a secure tenancy profile, the quality building and future development upside attracted a mix of local Gisborne investors, as well as Melbourne and international investors, the agents said.
“This was a very strong result and one that we are going see more of into 2020 as a result of the lack of stock and attractive yields on offer, along with factors such as development upside and positive regional growth forecasts,” Wizel said.
“Investors are increasingly looking to property for yield and there is little indication that bonds and bank deposits are likely to offer up more attractive returns in the short to medium term.”
