A Melbourne medical facility was snapped up for $24 million at a commercial property auction on Wednesday on just a single bid.

But it was the sale of a suburban laundromat for just $835,000 which highlighted the appetite for higher-yielding non-residential assets from investors spurning the housing market.

In total $61.55 million of fast food outlets, medical centres, childcare centres and other commercial properties changed hands at a Burgess Rawson event at Melbourne’s Crown Casino, where 14 out of 18 offerings sold on the day.

The big result was the $24 million sale of a Lumus Imaging facility leased to ASX-listed diagnostics and pathology provider Healius.

The three-level building opposite the Epworth Hospital on Richmond’s Bridge Road was snaffled up by a Melbourne family on just one knockout bid. The vendor was an unlisted Australian Unity healthcare fund.

The specialist medical facility was offered with a lease until 2035 and brings in net income of $1.52 million, equating to a yield of 6.3 per cent.

“This family has been buying from us since 2001, and they love buying at auctions,’ said Burgess Rawson’s Yosh Mendis.

Chris Smith, GM of healthcare property, Australian Unity said the sale of Lumus Richmond was part of an active portfolio management strategy at its $3.6 billion Healthcare Property Trust.

“The proceeds from this sale will initially be used to reduce debt and ultimately, to fund brownfield and greenfield developments across the eastern seaboard,’ he said.

At a vastly different price point, a first-time commercial investor snapped up the premises of the Clean Streak Laundry – part of a successful chain of six outlets – in Berwick, an outer south-east Melbourne suburb for $835,000 on a yield of 5.1 per cent.

It’s the second laundromat Burgess Rawson has sold at auction in just over six months.

In August, a laundromat near Melton in Melbourne’s outer western suburbs offered with 10-year lease to the Blue Hippo Laundry chain attracted 115 bids before selling for $741,000 on a yield of 4.7 per cent.

Burgess Rawson chief executive Ingrid Filmer attributed the demand for laundromats and other smaller retail assets to the “mass exodus’ of investors out of residential, but who still want to be in property.

“This has really fed our auctions,’ she said

“You can’t buy a house in Berwick for less than $700,000, and you’re lucky if you get a 3 per cent yield. This investor has bought on a 5.1 per cent yield, and has a tenant, who has spent a fortune on the fitout, who is on a long-term lease.’

Ms Filmer said feedback from laundromat operators was that they are “quite booming businesses’.

“You wouldn’t think so, but they are incredibly profitable businesses. Traveller tradies use them a lot, there are no staff costs, and they pay a reasonable rent,’ she said.

Fellow Burgess Rawson agent Shaun Venables, who marketed the Berwick laundromat, was equally surprised that they were so popular again.

“It’s not just tradies that use them, but people like to use them to wash horse and pet blankets and other bigger items they don’t want to wash at home.’

Plus with apartments and townhouses getting smaller and smaller, laundromats were in demand again, he said.

It wasn’t just laundromats that were sought after at the auction, a cafe and psychologist rooms in Tooronga Village, Glen Iris (an affluent Melbourne suburb) were both bought by a local investor for a combined $1.2 million on a yield of about 5.8 per cent.

Also selling under the hammer was the Veludo Bar on St Kilda’s trendy Acland Street ($3.14 million on a 5.8 per cent yield) offered with a lease until 2030.

A medical centre in Wendouree, Ballarat offered with a new 10-year lease generated 28 bids before selling for $3.21 million on a tight 4.9 per cent yield.

Australian Financial Review – Larry Schlesinger