Buyers flock to '100 per cent COVID-proof' properties at Burgess Rawson auction
An office in the NSW Hunter region that had been leased to Centrelink for the past 25 years has sold to a Sydney-based investor for $2.015 million.
The result was a highlight of Burgess Rawson’s return to its in-rooms portfolio auctions in the wake of the COVID-19 pandemic, albeit with strict social-distancing protocols in place, with six properties slated to go under the hammer.
The Centrelink property, at 18-20 Yacaaba Street, Nelson Bay, attracted nine registered bidders and sold on a yield of 5.87 per cent.
It had been held by the vendor for 25 years, operating as a Centrelink the entire time, and is leased until May 2022 with further options to 2025.
Agent Kieran Bourke said the popularity of the property with investors was recognition of desire for secure, government-backed leases in the wake of widespread rent reductions during the pandemic.
“We had 133 inquiries and 32 contract requests during the campaign. This asset was a very good price point for a Centrelink,” Mr Bourke said.
“A guaranteed commonwealth government income stream is highly prized in the current market, with few such opportunities being available to purchase in any given year, particularly at this price point,” fellow listing agent Darren Beehag said.
The buyer is understood to already hold other government-leased assets.
Mr Bourke estimated that inquiries for the “essential assets” Burgess Rawson had chosen to focus on during the pandemic, including service stations, medical assets and government offices, had increased by 30 to 40 per cent.
“They are 100 per cent COVID-proof listings,” he said, adding that low bank deposit rates and a volatile share market meant people were “confident” bidding on such properties.
Three out of six properties slated for auction sold on the day, with a fourth selling prior.
Other sales included a Shell service station in Kurri Kurri, NSW. It sold for $3.055 million on a yield of 8.51 per cent.
The Cheesecake Shop in the ACT suburb of Wanniassa sold for $755,000 on a yield of 5.1 per cent, while a Shell service station in Hatton Vale, Queensland, sold for $6.8 million.
Most properties sell in Melbourne
15 properties were listed for sale as part of Burgess Rawson’s Melbourne portfolio auction, held one day after Sydney’s, with 13 selling under the hammer or prior to auction translating to a clearance rate of 87 per cent.
Burgess Rawson Melbourne Director Billy Holderhead said that total sales exceeded $46.8 million.
“Today was the first major commercial property auction event since COVID-19 restrictions eased,” Mr Holderhead said. “We are delighted with today’s results. There was a genuine buzz in the room and the pace of bidding was fast.”
A Hungry Jack’s freehold in Cairns was one the day’s highlights, selling to a regional Victorian for $5.21 million, $200,000 above reserve.
The result translated to a yield of 4.77 per cent.
Other results included the sale of three childcare centres in Victoria’s Werribee and Epping and Western Australia’s Padbury for a combined $17.277 million,
In addition, three fuel sites – a 7-Eleven in Queensland’s Redbank Plains, a Viva in Langwarrin, Victoria and Caltex in Moama NSW – sold for a combined $13.52 million.
