SYDNEY (CU)_The first Burgess Rawson auction for the year was held this week in Sydney, where a childcare centre attracted the most bids and a mystery bidder picked up two properties for over $15 million.
The commercial property auction took place on a rainy Tuesday (22 Feb), amid the looming threat of a train strike, with many buyers forced to stay at home and bid either online or over the phone. A total eight properties were sold for $39.6 million, on a blended yield 5.63 per cent, which according to Burgess Rawson partner Kieran Bourke, amounted to a decline in volumes compared with late last year.
“It’s always a little bit tough at the start of the year trying to get people out of holiday mode to sign agency agreement, pay marketing, and get photos taken – it’s purely just a timing thing,” he said, adding that the pipeline is looking strong over the next few weeks. According to Bourke, 70 per cent of bidders did so remotely, including a last-minute mystery buyer who impetuously bought The Alby Pub in Canberra for $8.3 million, just a few minutes after paying $6.96 million for a car yard at Coffs Harbour. “It happens all the time,” Bourke said.
The Alby Pub, which has an annual rent of $440,000 was bought on a yield of 5.3 per cent, by the buyer who had already inspected the property. He paid a tighter yield for the Bellbowrie European Motors, in Coffs Harbour, in the south-eastern state of New South Wales. The former came with a 10-year lease to National Group with annual increases of 3 per cent, while the latter came with a 10-year lease and 10-year option to the Tony White Group.
According to Bourke, at the Burgess Rawson auction, the most bids were attracted by Busy Bees childcare centre in the town of Picton, south-west of Sydney. The property was in high demand and was eventually sold at $3.29 million, around $300,000 above reserve, on a yield of 4.38 per cent, which was the lowest yield at the auction.
“Child care just keeps on keeping on,” the Burgess Rawson partner said. “It was a Sydney-fringe child care operation, a government funded asset class. In that price bracket, around $3 million, we were always going to have plenty of bidders.”
