This article is from the Australian Property Journal archive
The RBA’s first interest rate cut in four years drove more than $75 million in commercial property changing hands at Burgess Rawson’s first portfolio auction event of the year, held over three days across the eastern seaboard.
The overall success rate was 78.26% with the blended yield coming in at 5.41%, down from 6.29% at the December auction event.
Tuesday’s Sydney event netted a 100% clearance rate. Goodstart Early Learning centres sold on tight yields – the Wavell Heights centre in Brisbane sold for $4.12 million, on a circa 3.72% return, and the Redcliffe centre – billed as an entry-level opportunity – sold for $3.031 million on a yield of around 3.63%.
“We are seeing unprecedented demand for well-leased centres, with sub 4% yields becoming the norm,” said Burgess Rawson partner and Queensland managing director Adam Thomas.
He said confidence has surged with the interest rate cut and declining inflation, driving exceptionally tight yields across the eastern seaboard.
Elsewhere in Queensland, an asset leased to Fellowship Queensland in Kearneys Spring sold for $1.826 million while an investor snapped up a Newtown property leased to United Housing Australia for $1.851 million.
At the Melbourne auction, the Pets Domain in Legana, Tasmania was first off the rank selling under the hammer for $3.855 million reflecting a return of 5.45%.
The Melbourne offering’s tally of $37.5 million was helped by the $12.5 million pre-auction sale of a Pakenham industrial facility occupied by precast concreting brand Civilmart. Also sold prior to auction was a brand-new 7-Eleven fuel and convenience station, perched between future McDonald’s and KFC restaurants in the new outer south-west Melbourne suburb of Mambourin, for $6 million. That showed a 5.89% return.
Other transactions included the Kinderoo Childcare Centre at Rosehill which sold under the hammer for $3.78 million while a Norco & Winc asset in South Lismore transacted for $5.05 million.
