This article is from the Australian Property Journal archive
A POTENT cocktail of ultra-low interest rates, FOMO and pent up demand has pushed investors to splurge $109 million at a commercial property portfolio auction in Melbourne yesterday, which saw a 100% clearance rate across the 26 properties offered.
The latest Burgess Rawson portfolio event in Melbourne was among the largest and most successful of its series, and followed a smaller Sydney edition on Tuesday that saw six out of eight properties sell on the day.
Pub investments were among the highlights. In Queensland, the Pelican Waters Tavern in Caloundra on the Sunshine Coast sold for $10.8 million on a 4.15% yield, among the sharpest of the day.
A pair of ALH-operated venues in Brisbane’s Kedron sold early in proceedings. The Edinburgh Castle Hotel sold for $7.5 million on a yield of circa 4.65%, while the Kedron Park Hotel traded for $4.6 million, at just under 5%.
The Top Pub in the Victorian town of Morwell was picked up for $3,060,000 at 4.74%.
Another hospitality venue, in Melbourne’s St Kilda, leased to Lona sold prior to auction.
An inner Brisbane café proved to be a standout, with the home of Industry Beans selling on a tight yield of 4.08% with a $5,150,000 price tag.
Other assets trading at sharp yields included a Shell service station in Adelaide’s Klemzig, selling for $2,550,000 on a 4.19% yield, while a Carl’s Jr fast food restaurant in Melbourne’s northern suburb of Thomastown was snapped up for $6.41 million at 4.62%.
Childcare centres were a prominent feature of the event. A CBD facility leased to Brisbane City Childcare with a brand new 12 year triple net lease sold for $10.15 million. The 86 Astor Terrace property consists of a 1,030 sqm building licenced for 147 places and brings $672,379 in rent each year plus GST.
Other childcare centres to sell included:
- CREST Children’s Sanctuary in Dandenong South, for $7,630,000, bringing $388,500 plus GST and outgoings from a new 15 year lease
- Jenny’s Early Learning in Maiden Gully, with a 20 year lease to 2037 plus options returning $217,959, for $3,950,000.
- Imagine Childcare and Kindergarten in central Toowoomba for $6.63 million, returning $357,201 plus GST from a lease to 2035
- Affinity Education in Kelso, for $2.435 million, leased to 2028 with options and returning $148,732pa net plus GST and outgoings
A trio of Nubco Hardware sites in Tasmania sold under the hammer. In Hobart, a Mornington property traded for $2,085,000, on a 5.21% yield, while a Kingston site commanded a $4 million price tag that represented a 5.42% yield. A Wivenhoe property in Burnie sold for $1.25 million, at about 5.75%.
Also sold:
- A Morphett Vale building leased to a Dulux Trade Centre and Cash Converters was sold for $3.73 million, bringing $229,335 each year plus GST;
- A medical clinic in northern Melbourne’s Wollert, for $1,466,000, bringing $70,191 plus GST net yearly;
- In Warrnambool, a government-leased office building undergoing refurbishment with a new seven year triple net lease plus options for $5,575,000, and returning $287,100 plus GST. It was offered under instructions from KordaMentha;
- A pizza shop in Melbourne’s Craigieburn for $785,000. The strata property is leased until 2022 plus options and brings $42,677 in rent plus GST each year
- The Bairnsdale Cheap as Chips store
- A massage parlour in Oakleigh, south-east Melbourne
- A purpose built Queensland Government medical building in Mount Isa for $1.82 million
- A new Mount Gambier medical centre for $2.92 million, bringing annual rent of $186,129 net.
