Fierce bidding for a retail investment property in Bayswater that went to auction has provided a snapshot of Perth’s commercial market, illustrating the demand for well-leased developments.
The property, located on the corner of Guildford Road and Slade Street, was sold at auction by CBRE yesterday, with the winning bid of $5.45 million surpassing the agent’s expectations.
CBRE’s Ben Younger said while not all the outgoings of the property were known, that price represented a yield of 5.9 per cent.
Mr Younger said the buyer, a local private investor, was attracted by the strong leasing profile of the site, which has long-term tenants in Red Rooster, Muzz Buzz, Snap Fitness and Life Ready Physio.
“It had good reputable tenants so you know that the rents are going to be paid,” Mr Younger told Business News.
“As long as people feel safe in the tenant and like the lease term, they’ll jump at it.
“There were seven different bidders and it went well beyond reserve and well beyond expectations, so it was an absolute classic auction result.”
Mr Younger said there were 75 enquiries throughout the four-week selling campaign, while around 50 people attended the auction.
He said that level of interest was indicative of the level of demand for good quality investment property in current market conditions.
“There’s not enough good quality investment stock available, so when something does come up people go pretty hard at it,” Mr Younger said.
“That was totally evident today.
“The office market is struggling, the development market is patchy, but interest rates are low, people have money and they want to put it somewhere that’s going to give them a good long-term return.”
