This article is from the Australian Property Journal archive
INVESTORS chasing yield have snapped up more than $31.3 million worth of retail, bank branches and food outlets at a Burgess Rawson property portfolio auction, which saw a 91% clearance rate.
Two properties listed for sale sold prior to the event held in the Yallamundi Rooms at Sydney Opera House, meaning 11 out of the 12 offerings were picked up.
The biggest sale was of a Kids Club Childcare centre in Brisbane’s Kedron. The only Queensland offering sold for $5.7 million and on a yield of 6.09%, with a 15 year lease plus options to 2055.
An LJ Hooker Atlas site located in the Neutral Bay region sold for $4,280,000 on a 5.69% yield. The real estate tenant has a new 4.5 year lease to September 2025 with options to 2031 over the high-tech building over two strata lots.
“This property ticked so many boxes for hungry investors. The premium tenant, the prime Neutral Bay location and the impressive fit-out meant we had enquiries flood in pre-auction and were not surprised that investors came ready to fight to add this investment to their portfolio,” Burgess Rawson sales director, Michael Gilbert said.
Only one asset snuck under the 5% yield benchmark – the day’s first offering, a Pizza Hut outlet in Sydney’s Waterloo, which traded for $2,560,000. Not far behind was the Commonwealth Bank branch in Batemans Bay, selling for $2,340,000 at 5.09%.
“Investor interest in the South Coast region is growing exponentially, and with the CBA occupying a prime piece of real estate in the centre of town, we anticipated a healthy sale,” Gilbert said.
“The sale of this asset also reflects the confidence investors have in banks. Not too long ago there were concerns around the stability of banks as an investment opportunity, however those concerns have dissipated, and the attractiveness of these assets are at an all-time high.”
Regional NSW assets to change hands also included a Harvey Norman outlet in Armidale for $3,450,000, on a 6.44% yield and where the retailer has just renewed its lease, while the $2,905,000 sale of a Centrepoint Arcade in Kempsey represented a yield of 7.47%, and a Grafton mixed use building fetched $890,000 at 7.48%.
Prior to auction, the Ford dealership in Narrabri sold for $1.92 million, at 7.5% and subject to a new five year lease and option to 2031, while the Uralla BP sold for $2,030,000 on a high 9.01% yield with a 10 year lease plus options to 2049.
A Hitt Republic gym in Phillip, in the ACT, sold for $2,200,000, at 5.71%.
In Sydney’s Seven Hills, a development site spanning 1,708 sqm and with a 24-metre height limit at 155 Prospect Highway sold for $3.101 million. The busy location sees 57,000 vehicles passing each day.
