Bidding frenzy for offices

TWO auctions last week saw two very different central business district properties sell under the hammer to investors for over $1 million.

Agent Tim Darcy, who auctioned both properties for Darcy Jarman, said showed investors were seeking tenanted properties in prime city locations.

One auction was for a historic property tenanted by a flourishing cafe while the other is leased to several firms offering professional business services.

Mr Darcy said the two-storey building at 15 Yarra St, which has secure leases in place, had attracted a great deal of attention before the auction and on the day from investors in and out of the region. “A Melbourne-based investor overcame eight other interested parties to secure the property for $1.635 million,” he said. Mr Darcy said the fierce competition at the auction
showed genuine commitment to purchasing by active investors. “We had nine interested parties bidding and the auction opened at $1 million,” he said. “After a frenzy of 45 bids, the property sold under the hammer.”

He said the 473sq m property, constructed in the 1990s, was sold to an investor as their first foray into the Geelong commercial property market. The property is leased to three tenants with a total rental of $90,917.88 per annum, plus GST.

“The sale of the Yarra St property at this amount represents a yield of 5.56 per cent,” he said. Mr Darcy said the Geelong market’s offering and potential impressed the investor “They were attracted by the quality, amenity and location of the property and the perception of Geelong,” he said. “They also see Geelong being a future high growth market with a secure income stream.”

Mr Darcy said the other auction was for the former Baptist Church which adjoins Centrelink and Australian Tax Office buildings. This was also snapped up. “The old chapel at 10 Little Ryrie St, sold under the hammer for $1,055,000,” he said. “Bidding started at $800,000.” Mr Darcy said there were five parties bidding for the 345sq m property, which has a 324sq m building. “A couple of the bidders were also interested in the property at 15 Yarra St,” Mr Darcy said. “The historic property was eventually sold to a local private investor with a Geelong-strong portfolio.” Mr Darcy said one of the attractions was that the property came with a long lease in place. The former Mount Zion Strict Baptist Chapel has income of $69,000 per annum plus GST and outgoings. The Business-2 zoned property is a tenanted investment with a restaurant and cafe, Chapel on Little Ryrie, leasing the building.

Mr Darcy said these two auctions show confidence in the Geelong commercial market is robust. “These results are a fair endorsement for well secured, well located and central city properties,” he said.