$22,860,000 in premium investments sold in PPPA IX
| 6 August 2019
The second CBRE Premium Property Portfolio Auction (PPPA) of 2019 has netted $22,860,000 and highlighted continued demand for quality investment assets.
Five of the six properties were sold, with multiple bidders for each asset and one of the properties sold ahead of auction – translating to an overall clearance rate of 89% and an average yield of 5.42%.
“The properties offered on the night each attracted an average of five bidders, which is a strong indicator of the continued demand for premium investment properties,” CBRE’s PPPA Head Joseph Du Rieu said.
“The results highlight the appetite from both domestic and international investors for sub $15 million investments, particularly assets with long leases and fixed income growth and also for value-add opportunities in premium locations.”
A standout transaction involved the former Target store on the Centre Road strip in the Melbourne suburb of East Bentleigh, which sold under the hammer for $9.5 million - $2 million over the reserve price.
Rorey James, head of CBRE Strip Retail Investments, said eight bidders pursued the site, which presently features a 1,153 sqm office/retail building and is prime for redevelopment and/or repositioning.
“With 13 bidder registration forms signed and eight bidders competing, including more than a third from Asian capital, the appetite from domestic and international buyers towards good quality retail investment properties remains strong,” Mr James said.
In another strong result, a new United Petroleum service station at Queenstown in South Australia was sold for $5,250,000 - $250,000 above the reserve price – reflecting a yield of 6.34%.
The asset was sold on behalf of prominent Adelaide developer Nick Emmett to a local private investor, who outbid two interstate competitors.
Another newly developed highway service station at Winchelsea in Victoria was sold ahead of auction for $6.6 million after attracting 73 enquires. Underpinned by a 15-year lease to Caltex, the property was sold on a tight yield of 5.98%
The other PPPA transactions involved two shops at Melbourne’s Bentleigh Shopping Centre, which were individually sold for $820,000 and $690,000.
Mr Du Rieu noted that all the purchasers were private buyers, with more than half of the sales involved locally domiciled or offshore Asian investors sourced through CBRE’s Asian Services Desk.
Sale negotiations are ongoing for the sixth PPPA property, a Zambrero restaurant site at Murray Bridge in South Australia, with contracts expected to exchange by week’s end.
The next Premium Property Portfolio Auction will be held on October 10. Two Woolworths supermarkets have already been confirmed, with three positions in the portfolio remaining.
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