Market Insights

09.04.2019

$30,000,000 in premium property investments sold in first PPPA of 2019

The first CBRE Premium Property Portfolio Auction (PPPA) of 2019 has netted $30,000,000 and highlighted strong demand for quality investment assets.

Five of the eight properties were sold, with multiple bidders for each asset and several of the properties sold ahead of auction.

The remaining three assets are under offer, with deals expected to close in the next few days.

CBRE Director Mark Wizel said the active bidding on the night was a strong indicator of continued confidence in premium investment properties.

“The security of premium properties with long term leases is drawing continued interest, with interest rates still at record lows and alternative investments such as cash, bonds and shares offering much lower rates of return,” Mr Wizel said.

The standout sale on the night was the 7-Eleven Werribee in Melbourne’s south-west, which was pursued by seven domestic and international bidders before it was sold under the hammer for $5,930,000, reflecting a yield of 5.04%.

“What we learnt from the auctions on Thursday night is that there continues to be strong buyer interest from international buyers of Chinese heritage as the shift in demand from vacant land holdings towards premium income producing properties continues.”

“We had bidding from this buyer segment on 7 of the eight properties offered in the portfolio, this tells us that our current and future customers will benefit from our continued efforts in educating the Asian buyer market of the benefits of owning secure income producing real estate in Australia.”

CBRE’s PPPA Project Head Joseph Du Rieu said the property was purchased by a local private investor from Werribee.

“It was clear the buyer was attracted to the modern nature of the improvements and the guaranteed security of the 15-year net lease, however the competitive bidding in the room on the night was a key factor in defining the price,” Mr Du Rieu said.

Other sales included the 7-Eleven at Windaroo, south of Brisbane, for $6,300,000 (5.95% yield) and 755 Burke Road, Camberwell in Melbourne’s east.

Also sold was a freestanding IGA supermarket in the Melbourne suburb of Ringwood East, which fetched $7,340,000, reflecting a yield of 5.40%. The Corcoris family, who have owned and operated the property for over 42 years, sold the property on a 10-year leaseback.

Family spokesperson Arthur Corcoris said the sale would allow the family to focus on operating the business to a continued high standard while providing for the local community. 

The next Premium Property Portfolio Auction will be held on June 6th with two positions in the portfolio remaining.

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