Regional commercial real estate portfolio sold privately after auctions cancelled

Published on: 16 September 2020

Fifteen east coast commercial properties which were to have been offered at portfolio auctions that were cancelled this quarter because of COVID-19 restrictions, have found buyers following private sale campaigns.

Seven assets are leased to businesses considered essential services.

Three shops, two offices and two factories – all being outside of Victoria – are also tenanted to businesses which are still trading.

The investments sold on yields between 5.2-8.4 per cent.

An industrial development site in Queensland’s Gladstone which fetched $1.5 million formed the balance of the portfolio which has traded.

The priciest property was a service station in Berkeley Vale, between Gosford and Newcastle, on the New South Wales Central Coast.

Leased to Shell and Oporto until at least 2032, 1A Tumbi Creek Road traded for $7.95m – a 5.97% yield.

On 3448 square metres, with 0 car parks, the site is opposite a retail strip occupied by Domino’s, KFC, Hungry Jack’s, McDonald’s and Subway.

A Woolworths Petrol complex at 337 West Street, Umina Beach, about 16 kilometres south of Gosford, also sold: the $3.52m price representing the tightest yield of all assets within the portfolio.

A Queensland 7-Eleven outlet at 85 Perth St, Toowoomba exchanged for $4.25m on a 6.75% yield.

A childcare centre at 5-31 Anakie Road, Bell Post Hill, in inner north west Geelong, found favour for $5.3m, also reflecting a 6.75% yield, while another, 46 Collyn-Dale Drive, in Wangaratta, also in Victoria, fetched $2.375m – a 6.45% return.

The only other properties to sell for more than $2m were both in New South Wales: a Dubbo bank at 125 Macquarie Street and a Harvey Norman occupied bulky goods asset, 5-9 Saleyards Road, Parkes.

The two cheapest assets were both Queensland offices: at 9/547 Woolcock Street, Townsville, tenanted to the state government’s Sunwater (trading for $748,000), and another, leased to ASX-listed Veris, at 30 Chapman Street, Proserpine ($716,000).

An Airlie Beach shop, 350 Shute Harbour Road, occupied by Cotton On Group’s Factorie, also exchanged, for $930,000 – and on the portfolio’s highest yield.

Burgess Rawson director Billy Holderhead said that despite the success of private sales – the agency will resume its portfolio auction event on September 23, which will be streamed and take telephone and online bidding.

The agency has upped the video content and number of imaged in its campaigns ahead of it.

“While we’ve enjoyed the success outside of the auction process, feedback from the buyers has been that they prefer the transparency and spontaneity of a real-time auction,” the agent said.

“It means they know exactly what they have to beat in order to secure the property” Mr Holderhead added of the transparent auction process.

“Buyers are keen and ready… so we’ve had to adapt quickly,” he said, confirming 13 investments will go under the hammer next week.

By Marc Pallisco, realestatesource.com.au

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