This article is from the Australian Property Journal archive
IF absence does make the heart grow fonder, then two months has been a long time for commercial property investors.
After a sluggish finish to 2017 the Burgess Rawson portfolio auctions have made a fast start to 2018, with commercial property investors showing pent-up appetite built over the summer months.
Of the 18 properties offered, 12 sold under the hammer – including the first eight assets offered– and three transacted before the auctions, overseen by Jesse Davidson of Auctionworks at Doltone House in Hyde Park.
In contrast, the last portfolio auction for 2017 – held on December 13 – yielded a clearance rate of just 35% with seven out of 18 offerings selling under the hammer.
Leading the way yesterday was the Redfern Commonwealth Bank site, which sold for a strong $4.1 million to open proceedings. The two-storey building is on a corner site and returns $161,960 per annum net plus GST, with a 10-year deal plus options from December 2020.
Another CBA site –118 Great North Road in Five Dock, sold for $2.55 million immediately afterwards. It has a seven-year lease until 2021 and options until 2031, bringing in $113,500 per annum net plus GST.
The day’s biggest tag was delivered by courier service Star Track’s Unanderra facility at 185 Berkeley Road. The 1.562-hectare site has a 4,484 sqm office and warehouse building with positioned just off the Princes Motorway. It sold for $9.6 million, with a net income of $825,114 per annum plus GST. Star Track is owned by Australia Post and the federal government.
That was followed by the $6.255 million sale of a new Coles Express and Gloria Jeans site at 72 Bells Line Of Road in North Richmond, on Sydney’s north-western outskirts. The 2,742 sqm site has a 64-metre frontage and returns $379,000 per annum net plus GST. It has leases of 10 years to each operator plus options.
Another new convenience and fuel centre site – the 7-Eleven in Lake Illawarra – fetched $5.615 million. Located at 2-4 Peterborough Avenue, the 1,750 sqm site has 94 metres of street frontage, including 52 metres to Shellharbour Road, and is just 250 metres from Warilla Grove Shopping Centre. It sold with a lease until 2030 plus options, returning $328,508 per annum net plus GST.
A Hervey Bay corner site of 1,346 sqm at 71 Kent Street, with a fuel station, Ultra-Tune and General Store changed hands for $760,000 and a net return of $50,785 per annum plus GST. That was followed by the $610,000 sale of a 961 sqm Repco site at 343-345 Clarinda Street in Parkes, with a six-year lease until 2020 and options until March 2026 to the long-standing tenant. It has a 775 sqm building and returns $42,247 per annum net plus GST.
Investors showed an appetite for Queensland fast food offerings, snapping up a KFC site in Tannum Sands for $2.01 million and a Red Rooster, Pizza Hut and Troy’s Kebabs site in Currajong for $2.9 million. The Tannum Sands KFC on a 2,000 sqm corner site at 1 Booth Avenue, adjacent to the Coles-anchored Tannum Central shopping centre, is leased until July 2022 with options until 2032 and brings in $109,980 net each year plus GST. The Currajong property at 196a Woolcock Street is on a 2,001 sqm corner site and returns $207,848.44 per annum plus GST.
A 1,024 sqm Bulahdelah site tenanted by ASX-listed fast food alternative Oliver’s Real Food changed hands for $2.075 million, with a new 15-year lease to 2033 and options until 2048 and returning $120,000 per annum net plus GST.
Another bank, the historic 298 sqm two-storey NAB colonial building in Gundagai’s town centre, sold for $592,000 with a new lease until October 2020 and options until 2026, returning $33,215 per annum plus GST. NAB has occupied the building, on a 914 sqm block, since 1880.
The final property offered on the day was the Ocean & Earth site at 12 The Springs Road at Sussex Inlet. The 2,850 sqm showroom, office and warehouse facility of 2,850 sqm is on a 5.66-hectare site and sold for $1.91 million. The surd brand distributor has been at the site since 2000 and has just signed a seven-year lease until 2025 with options until 2031.
The event was a rare occasion that childcare centres took a backseat to the action. A Swan View centre in Perth’s outer north-east at 31 Balfour Road, with a 10-year lease to Affinity Education Group until 2025 and options until 2045, sold prior to auction with a return of $73,431 per annum net plus GST; while the Deakin School for Early Learning in Canberra also sold before yesterday. The 2,250 sqm site has a new 20-year lease plus options to 2058 and returns $306,000 per annum net plus GST.
Another ACT childcare centre – the Little Penguins Early Learning Centre at 98 Fullagar Crescent in Higgins – was passed in. The large 4,575 sqm property has a 1,126 sqm building and a brand new 25-year lease and a 10-year option.
Also passing in was a Villa eatery at 212C Oxford Street in Brisbane’s Bulimba, and The Reject Shop at 241-247 Carp Street in Bega.
The other property to sell before auction was the modern industrial facility at 48-50 Vance Road in Leeton, leased to Cummins South Pacific Pty Ltd, part of global fuel and generator company Cummins. The 3,895 sqm site sold with a five-year deal until 2022 and another five-year option, returning $80,000 per annum plus GST.
Australian Property Journal
