The Ultimate Investment Property Arena
As restrictions continue to ease, and we take a collective sigh of relief that Australia is steadily reopening, there are certainly good economic indicators.
Our nation is technically out of the COVID recession; there is growing confidence that a vaccine will be available soon; GDP in the September quarter increased by 3.3%; and money remains cheap and readily available.
Burgess Rawson’s focus throughout the pandemic has been on essential service investments, which has made up 83 per cent of our sales.
Since COVID, Burgess Rawson has sold $574 million worth of property across 184 sales, making us the most active commercial agent in Australia.
Demand for liquor, supermarket, pharmacy, fuel, childcare and government investments, for instance, is more intense than ever and we can now demonstrate that there has been no COVID-19 related price deterioration in these sectors.
Demand for freehold investments leased to non-discretionary businesses has accelerated over the past 12 months, in particular with private ‘mum and dad’ investors looking for an alternative to the residential market attracted by greater security and long-term returns that commercial property provides.
There has been a clear distinction between properties where tenants have traded through COVID-19 and those that have not.
Despite a lot of broad brush negative commentary regarding the retail market, essential service businesses have been well placed to benefit from community lockdowns. Buyers are aware of this and recognise the ‘defensive’ qualities of these investments.
An example of this was our recent record breaking off market sale of Dan Murphy’s in Wangaratta.
We broke our own regional yield record in the large format liquor sector with the $8.1 million sale, reflecting an initial yield of 3.68% based on the estimated base rent or 4.34% including the estimated turnover rent.
After a near perfect success rate in 2020, Burgess Rawson has very few listings remaining from last year.
This huge, pent up demand will result in records being broken this year.
Burgess Rawson’s next Portfolio Auction is on Wednesday 24 February followed by our March Portfolio Auction on the 31 March at Crown Melbourne.