Melbourne, 31 May 2016 – A veterinary surgery in Clayton has sold under the hammer for $2.21 million on a yield of 3.9% – exceeding the reserve price by a massive 45%.
Sandro Peluso and Josh Twelftree from CBRE’s City Fringe and Metropolitan Investments teams steered the highly competitive auction of the Southern Eastern Animal Hospital in front of a packed crowd of over 75 attendees.
The auction was contested by 11 separate bidders, including three offshore groups and an array of local investors.
Mr Peluso said the competition had resulted in a record sale yield of 3.9% which he noted was well below the average return for this style of investment product, which normally transacted at yields in excess of 6%.
“Today’s result follows a spate of strong transactions in the medical and aged care sectors, including the $5,050,000 sale we just negotiated of an aged care facility at Frankston,” Mr Twelftree said.
“These types of investment assets have long been seen as an excellent ‘defensive’ option because they are less affected by economic cycles than other property assets. They also benefit from long and stable tenancies, providing steady, reliable income streams and capital value stability.”
The 1357 Centre Road, Clayton property was offered on a sale and leaseback basis, which Mr Twelftree said was becoming increasingly popular as owners capitalised on the current strong selling conditions.
The new 15 year lease includes 4% fixed annual rental increases, providing strong income growth prospects.
The prominent, two-level building has a net lettable area of 350sqm and includes eight onsite car spaces.
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.