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$65m+ of alternative assets to go under the hammer as online commercial auctions return

Michael Collins • 22/07/2021

Private investor demand for commercial property assets continues to run hot, with interest rapidly building for a portfolio of 12 properties being brought to market at Cushman & Wakefield’s next portfolio auction, livestreamed on 28 July. The online-only auction will be the first in 2021 amid tightening restrictions in NSW.

The portfolio comprises assets across fuel and convenience retail, childcare, medical and retail sectors, located predominantly in Queensland, and spanning New South Wales and Victoria. Expected sale values across the portfolio range from $1.65m to more than $10m, with forecast yields averaging 5.66%.

According to Cushman & Wakefield’s National Investment Sales team, investor enquiry is running ahead of previous auctions held in 2021 and late 2020. To date, the team has fielded 889 enquiries across the 12 assets, expecting that level to surpass 1,000 by auction day. In an even stronger sign of tangible interest, 161 requests for contracts have been received, equating to 18% of enquiries, and a number of pre-auction offers has resulted in a Tranzmile truck and trailer parts showroom in Kingaroy, Queensland, selling prior to auction for an undisclosed amount.

NIS childcare asset

54 Junction Road Morningside QLD 4170 - View property

Headlining the auction is the Morningside G8 Childcare Centre located in inner city Brisbane on a 15 year lease, with a price guide of upwards of $6.5m. The asset provides a significant rental return of $356,614 pa. A United in Altona North, Melbourne is also expected to sell for around $8.5m, plus United-leased investments in Terrey Hills, Sydney is expected to fetch $7 m and Coopers Plains in Brisbane, circa $7.9 million.

Childcare assets continue to rank high on investors’ wish lists with the sector buoyed by significant government support. Among the four Queensland-based childcare properties attracting inquiry is a Arana Hills Kids Club, with a price guide of over $65 equating to a yield of 5.5%

Rounding out the portfolio are a Wollongong BCF and Dominos, with a price guide of $7 million, as well as a Bupa Dental Corporation in the inner-Sydney suburb of Glebe, with a price point of over $3.5m. A Brisbane CBD Malt Traders bottle shop is also expected to be hotly contested.

NIS_united_july

1014 Beaudesert Road, Coopers Plains QLD 4108 - View property

Cushman & Wakefield’s National Investment Sales team of Michael Collins, Tom Moreland, Aaron Dahl, Yosh Mendis, and Geoff Sinclair are managing the sales campaign leading up to the auction.

Cushman & Wakefield’s Head of National Investment Sales, Michael Collins, said: “We have witnessed a boom in the private commercial investment market over the past nine months, and its gaining further momentum. Inquiry levels are outpacing previous campaigns, and we’re seeing an unusual amount of early offers as investors try to get ahead of feverish auctions to secure property.”

“Alternative commercial properties are trading on sharper yields as records continue to fall across asset types and locations. That’s being driven by yield hungry investors attracted to strong, long-term leasing covenants in sectors that continue to trade even in spite of lockdown orders.”

“We are also seeing strong fundamentals in a range of sectors. Service stations have benefitted significantly from the uplift in regional travel and that’s expected to continue. Population growth and ongoing government support bode well for the childcare sector, and well-positioned fringe and metropolitan fast-food assets rarely come to market and when they do we are seeing record prices paid to acquire them.”

The portfolio auction will be conducted on Wednesday 28 July from 10:00 am and will be live streamed on Auction Works via their live auctions portal with a remote bidding room in Brisbane.