Burgess Rawson exceed expectations as they sell $119 million of property

"The outlook for commercial property investment remains bright." 

Sydney 

Burgess Rawson’s 153rd Portfolio Auction kicked off with a successful first day in Sydney, at the Sydney Opera House. The volume for the day, $44.84 million, was markedly higher than the volume of the preceding auction in May, and was propelled by a number of flagship landholdings. 

The first sale of the day was one of the most significant, with a Caltex facility in the Central Coast suburb of Lisarow selling for $2.15 million, achieving a sharp yield of 3.95%. Newly built in 2020, the property is extremely landlord friendly, with there being zero repair and maintenance obligations for the landlord, and with the ownerships of tanks and remediation the responsibility of the tenants.

884 Pacific Highway, Lisarow NSW

Fuel and convenience retail assets were a motif throughout the day, with two Shell stations also going under the hammer. The first, located in Beresfield, was sold for $6.925 million, and came with a long 15-year lease that includes option until 2050. The second, in Wilton, sold for $5 million, and is positioned in a growth area that is set to see residential and commercial developments expeditated, to make room for a swelling population.  

Additionally, the Lake Macquarie suburb of Charlestown proved popular, as two properties on the Pacific Highway both secured sales. Lot 5 at 158 Pacific Highway, currently occupied by the fast-food giant Domino’s, sold for $1.325 million. With its high exposure and an attractive 10-year lease, it was no surprise that this property found a worthy investor. Additionally, Lot 1 at the same address, home to Hunter Psychology Services, sold for $1.56 million, as demand for essential services remains high.  

At a clearance rate of 81.25%, the Sydney leg of the auction proved to be the perfect opening to the three-day event. 

Burgess Rawson Portfolio Auction - Melbourne

Melbourne 

The Melbourne instalment featured an array of high-quality landholdings from all manner of asset classes, with particular emphasis placed on the childcare sector. Of the five total early learning centres on offer throughout the three days of auctions, four of them were put up for auction in Melbourne. The Crown Casino’s River Room saw three of those four properties sold under the hammer. 

The most substantial of these landholdings was the first to go, as the Great Beginnings facility in the Ballarat-adjacent suburb of Mount Clear accrued a $5.2 million return, for an estimated yield of 5.37%. Run by one of Australia’s most reputable private early childhood care providers, G8 Education, 26 Olympic Avenue carries with it a secure 20-year triple net lease to 2037, with additional ten-year option to 2067. With its proximity to Ballarat, one of the growth capitals of regional Victoria, the new owner of the property should be extremely pleased with their latest acquisition. 

26 Olympic Avenue, Mount Clear VIC

The childcare sector has become a stalwart of Burgess Rawson’s portfolio auctions, and that is likely to continue, as the new Labor government comes into power. Anthony Albanese’s election campaign emphasised the importance of early education, promising to implement policy that further increased subsidies for lower- and middle-income families, so as to increase incentives for parents to participate in the workforce. With three of the four childcare centres presented in Melbourne selling at auction, it's safe to say that the market is responding to these political developments with enthusiasm. 

Elsewhere, competitive bidding was frequent. The first property of the day was a Ferguson Plarre Bakehouse that galvanized the crowd, receiving in excess of 100 bids, before eventually being sold to an in-room bidder for $1.26 million, achieving a low yield of 4.29%. Epping was well-represented, with both the Ferguson Plarre Bakehouse and an Epping Kingswim outlet successfully finding new owners. As the area is in the midst of experiencing significant growth (60% forecast population growth by 2041), investors are taking advantage. 

Regional Victoria was a consistent fixture in the order of sale, with properties in cities like Wangaratta, Geelong, and Cobram selling at auction. Of particular note was a United Petroleum station in Bendigo that had recently signed a new 12-year lease to 2034. Sitting on a 4,004 sqm corner site with 130 metres of combined frontage to Marong Road and Specimen Hill Road, the auctioneer was able to transform a starting bid of $5.6 million into a closing figure of $6.35 million. 

With a blended yield of 5.56% and a total clearance rate of 87.50%, day two was a lucrative outing for the Burgess Rawson team.

Brisbane 

The closing day provided some of the best results of the event, with properties sold in the sunshine state selling for an average of 6.56% over reserve, and possessing an averaged yield of 5.24%. Headlined by an outstanding sale for a property in Ascot, the Hilton Hotel played home to over $26 million worth of transactions. 

The aforementioned Ascot site, leased to both Ascot Medical Centre and QML Pathology, defied expectations by attracting over 130 bids between seven individual investors. 79 Racecourse Road is a prominent DC1 District Centre zoned site over 756 sqm, and possesses secure 5- and 7-year leases for its two tenants. On a net income of approximately $174,932, the landholding was sold for $4.301 million, for a yield of 4.07%.

79 Racecourse Road, Ascot QLD

Elsewhere, the fuel retail stations remained a constant fixture, with two 7-Eleven investments selling for significant figures. The Gumdale 7-Eleven located at 689 New Cleveland Road was able to secure a $6.13 million figure, thanks to being located on a commanding 2,336 sqm site with combined 99 metres of frontage and exposure. Meanwhilst, the East Brisbane 7-Eleven was purchased for an impressive $7.12 million, for a yield of 4.91%. Situated in one of the more affluent and dense catchments within Brisbane, 999 Stanley Street East was positioned as an asset offering true peace of mind for investors.  

After three days of auctions, Burgess Rawson’s 153rd Portfolio Auction had witnessed over $119 million in capital changing hands. As the numbers can testify, the commercial property market continues to trudge forth, despite difficult economic circumstances. “There is a lot of conflicting commentary on the overall economy,” stated Burgess Rawson Managing Director QLD, Adam Thomas. “[Despite this] the outlook for commercial property investment remains bright.”