Stonebridge’s National Investment Sales June Portfolio Auction has demonstrated continued demand from private investors for quality, long term leased assets, with over $40 million of property selling at or prior to Auction.
The Portfolio Auction campaign achieved a 100% clearance rate with an average yield of just 4.92%.
Childcare centres remain a favourite amongst high net worth investors, with four facilities selling for a combined circa $20 million. Headlining the childcare offerings was a modern facility on Pittwater Road at Brookvale in Sydney, which received 25 bids before selling under the hammer to a Sydney-based Chinese investor for $6,770,000, at a 4.90% yield. The other three facilities sold prior to auction, consisting of a brand new Imagine Childcare Centre at Maroochydore on Queensland’s Sunshine Coast, selling for $6,400,000 at a yield of 5.08%, a Goodstart Early Learning Centre at Keilor in Melbourne, which changed hands for $3,050,000 at a 4.46% yield and a G8 leased facility in Queanbeyan, outside of Canberra, for $3,550,000 at a yield of 4.98%.
Commenting on the childcare results, Stonebridge Partner Michael Collins said, “Truly metropolitan Sydney childcare offerings are scarce, yet highly sought after when offered to the market. The Brookvale result and depth of bids is testament to this. The broader childcare market continues to outperform other freestanding sectors in popularity, as investors take note of ever-increasing bipartisan support for the sector and the return on investment childcare services provides to the economy.”
Freestanding retail investments were also highly sought after at the Stonebridge event, with a Repco leased asset in Pakenham, Melbourne commencing the portfolio auction proceedings, selling 35% and $605,000 above reserve for $2,405,000, at a low 4.36% yield. The property sits in the heart of a bustling retail precinct and carries a renewed 3 year head company lease to a subsidiary of New York Listed GPC with no further options.
Stonebridge Partner Rorey James noted “ten registered bidders participated in the Repco auction, with five of these groups, and the ultimate buyer, sourced via Stonebridge’s Asia Practice. This signifies the ongoing confidence shown towards premium, income producing assets, by this buyer profile in particular.”
In Brisbane, a Yokohama-anchored tyre & auto and fishing retail outlet in the inner northern suburb of Stafford received considerable interest during the portfolio campaign, before finally selling for $4,290,000 on a 5.15% yield. The property was offered for sale by active Brisbane-based developer, OneFin.
Rounding out the portfolio highlights was a BP service station at Wollert in Melbourne which sold prior to portfolio launch. The asset provides a new 15 year lease to BP’s Australian Head Company and traded for $6,760,000 on a 5.16% initial yield.
Of the portfolio results, Stonebridge Partner Tom Moreland said, “Our data indicates prime freestanding assets in the sub $10 million market have only softened circa 50 basis points since the peak of the market 12-18 months ago, with childcare and freestanding retail investments being the most resilient. This softening is not commensurate with the 400 basis points of movement in interest rates, as private capital continues to view long term leased commercial real estate assets as safe-haven, annuity style investment vehicles.”
Stonebridge have a further circa $50 million of assets under contract or negotiation as part of their June Portfolio, with further announcements expected in the coming weeks.
For more information, please contact the agents below:
Tom Moreland | +61 408 072 822 | TMoreland@stonebridge.com.au
Michael Collins | + 61 404 023 204 | MCollins@stonebridge.com.au
Rorey James | + 61 439 400 018 | RJames@stonebridge.com.au
Kevin Tong | +61 422 848 818 | KTong@stonebrige.com.au
Nic Hage | +61 448 782 594 | NHage@stonebridge.com.au
Sarah Xi | +61 468 320 297 | SXi@stonebridge.com.au
Thomas Proberts | +61 439 588 019 | TProberts@stonebrige.com.au