A government-leased healthcare centre attracted 162 bids

Investors showed a strong appetite for government-leased assets, pubs, retail outlets and childcare centres at Burgess Rawson’s latest portfolio auction, with two days of sales totalling $58.3m.

At the Melbourne auction on March 26, eight of the 14 properties presented sold. A government-leased healthcare centre in Broome, Western Australia, attracted 162 bids. The offers started at $3m and eventually two parties locked into a bidding war, escalating the price by $500 increments before it eventually sold for $3.7m.

A Goodstart Early Learning Centre in Moulden, Northern Territory, fetched $2.15m on a 7.04% yield, while the Morwell Hotel, leased by ALH Group, was sold for $3.5m with a 4.96% return.

Burgess Rawson CEO Ingrid Filmer said increased borrowing power has sparked demand.

“We’ve seen a significant uptick in registrations since the interest rate decrease, which has really seen renewed interest in commercial property,’ she told Green Street News.

Filmer also said she has witnessed a trend where investors are converting multiple residential properties into single commercial holdings to counteract rising land taxes.

“In Victoria, they’re moving toward single commercial properties to benefit from lower, recoverable land tax and secure longer-term tenants,’ she said.

A day earlier, the Sydney auction saw $37.7m in sales after nine of the 12 properties presented found new owners.

Key transactions included PFD Foods in Geebung, which attracted nearly 50 bids before selling for $7.5m on a 4.82% yield, and Ampol at North Narrabeen – the highest sale of the day – at $8.2m (5.51% yield).

Childcare and fast-food assets also drew keen interest, with Young Academics in Seven Hills selling for $5.9m.

Filmer said she has seen strong demand for medical and childcare centres.

“It’s interesting to see medical and childcare investors crossing over as they seek the stable, government-funded income streams these sectors offer,’ she said.

Burgess Rawson’s portfolio auction event concludes in Brisbane today.

Green Street News