$102m investment property extravaganza: Burgess Rawson's portfolio auction signals investor confidence

“Confidence is still certainly high, and investors are actively looking to deploy surplus capital into proven sectors.”

Burgess Rawson's 154th portfolio auction graced Sydney, Melbourne and Brisbane during the first week of August, and it served up a bevy of sensational commercial properties for investors all throughout its three days. Here, we recap the event and its array of notable sales.

Sydney

The Sydney Opera House played host to Day 1 of the event, and it featured a broad selection of properties, including an Early Learning Centre in the western Sydney suburb of Woodcroft that was able to procure a 4.51% yield, based on an extremely secure 18-year net lease to Sydney childcare operator Young Academics ELC. Fixed 5% annual rent increases to 2025 with 3% increases thereafter proved too alluring to pass up, as one investor committed $2.698 million to securing the asset. 

Elsewhere, a Port Macquarie building leased to Property NSW was sold at $4.225 million, for a tidy yield of 4.28%. The Flynn Mcfall, Kieran Bourke, and Rhys Parker-marketed site located at 107 William Street has been approved for an additional building, and offers $180,722 pa net income via Legal Aid, one of the largest legal aid commissions in Australia.  

As is often the case, convenience assets attracted some of the most significant figures of the day, including a 7-Eleven service station in Cessnock which inspired a $6.4 million investment, and a recently completed Coffs Harbour Mobil outlet which was sold on a 5.5% yield based on a $5.275 million price. 

241 Wollombi Road, Cessnock NSW 2325

“The market has seen some change, but we’re seeing consistent demand for particular asset types,” stated Burgess Rawson’s Head of Agency NSW, Yosh Mendis. “Especially in the essential services sectors, such as childcare, service stations, fast food, non-discretionary retail and government leased investments.” 

With 9 of the 12 properties presented selling, Sydney served as a productive opener for the three-day property extravaganza, satisfying $31.474 million in investor capital. 

Melbourne

The Melbourne leg’s order of sale placed particular emphasis on the Epping and Epping-adjacent area, as two Harvest Home Road retail offerings generated passing yields of below five per cent as the hammer dropped. The first of the pair, an Augustus Gelatery outlet that comes complete with a high-quality fit-out and a recently signed seven-year lease to April 2029 plus options, intrigued investors by virtue of its humble but stable net income and Epping’s inherent value as a growth suburb. The resulting sales figure of $910,000 represents an initial passing yield of 4.40%; for a 100sqm site, $9,100 per sqm is a sensational result. 

Elsewhere, outer eastern Melbourne continued on its upwards trajectory as a set of Pakenham landholdings sold for a combined $2.384 million and generated passing yields of 4.61% and 4.71% respectively. The first Pakenham property was one of two listings in the supermarket asset class, and possessed a secure 15-year lease with annual 4% rent increases. The fruit and vegetable market sold for a very respectable $1.705 million, thanks to its reliable nature as an essential service.   

2/1 Webster Way, Pakenham VIC 3810

Regional Victoria’s best assets included two quality Shepparton sites, a Nextra outlet situated in the heart of Ballarat, and perhaps most notably, a hospitality offering in the township of Dinner Plain, one of Australia’s foremost alpine destinations. The hotel, run by leading operator Saltwater Hotels & Resorts, sold under the hammer for $1.28 million, for a yield of 5.53% - an Australian record for a commercially leased property in an alpine region.  

“Alpine regions are becoming year-round destinations, rather than seasonal, which is driving greater investment,” said Burgess Rawson’s Shaun Venables. “This, together with a lack of available land being released, is increasing the value of established commercial properties.” 

Altogether, Melbourne was the most lucrative outing for the agency, netting a 91% clearance rate as $50.346 million of property was exchanged.  

Brisbane

Brisbane racked up $21.15 million in sales as the portfolio auction come to a conclusion. Ten Queensland properties were presented to investors, as a clearance rate of 70% was achieved. The highest value sale of the Queensland portfolio was a mixed-use retail and commercial property in Bongaree on Bribie Island, which sold for $7,200,000 on a yield of 5.76%. The fully-leased freehold possesses a number of blue chip tenants that include the likes of NAB and The Coffee Club. 

In the Cairns suburb of Woree, a high-profile multi-tenanted freehold investment on the Bruce Highway sold for $3,400,000 on a yield of 5.91%. The large 2,699 sqm corner site is anchored by a brand new 10-year lease to Southside Veterinary Surgery, with options that extend to 2042. Additionally, new leases to national brands Anytime Fitness and Subway offer the new owner a diversified and secure source of income.  

1 Charlotte Close, Woree (Cairns) QLD 4868

“Confidence is still certainly high, and investors are actively looking to deploy surplus capital into proven sectors,” was the messaging from Adam Thomas, Managing Director (QLD) and Partner at Burgess Rawson. “There’s a definite shift in buyer profile and we’re seeing sophisticated private investors chasing quality, and certainty, without the usual competition from larger institutions. Freehold assets like the retail centre in Bongaree, with national tenants including NAB, The Coffee Club, and an established Medical Centre, will continue to perform well in this market.” 

In the inner-city, two prominent ground-floor retail tenancies at the McWhirters building in Fortitude Valley sold for $2,775,000 and $975,000, for yields of 5.75% and 6.05% respectively. The first of the two properties is a site leased to Australia’s leading national not-for-profit organisation, the St Vincent de Paul Society, and offers annual reviews based on CPI.  

After the three days, $102.971 million had changed hands as 81.82% of the properties presented had managed to sell. With an average yield of 5.52%, Burgess Rawson’s portfolio auctions continue to serve as one of the benchmarks the commercial property world looks to for guidance as to the state of the market.