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3Q 2017 Update
AUCTION INSIGHTSCommercial Research
Sold98.33%
Passed In1.67%
$93.332 million, 60 Auctions
Post Auction6.78%
Prior Auction22.03%
Under Hammer71.19%
59 SOLD Auctions
Source: Ray White Group *2017 to September (3Q)
Ray White Commercial Auctions 3Q 2017 Auction Results
Ray White Commercial Auctions3Q 2017 Auction Results, Sold By
This edition of Auction Insights looks at the transactions which have occurred during third quarter of 2017, being July to September together with the overall performance of the 2017 calendar year to date.
This third quarter period saw 60 commercial listings with Auction campaigns brought to market across the Ray White Commercial network (down from 76 last quarter yet up from 41 for the same period in 2016). These auctions yielded a robust selling rate, with strong clearance of 98.33% recorded with a total volume of sales of $93.332 million. The total calendar year to third quarter saw $251.513million change hands in auctions which represents163 sales across a total of 173 auctions.
Overall demand for commercial assets continues to be strong in 2017 after a highly competitive 2016 period. Trends continue to be similar however owners and buyer expectations have adjusted with lower yields commonplace across most investment quality stock, while changes to some financing regulations have slightly dampened some of this demand for some asset classes. The competitive auction environment has resulted in the bulk of sales (73.63%) selling under the hammer (2017 calendar year to date) with auction conditions with a further 15.34% sold prior. Earlier in the year the sales prior to auction had slowed with some urgency coming out of the market, however this period we saw some pick up in activity with a return of FOMO (fear of missing out) back in some markets. The remaining 11.04% concluding shortly after the auction campaign when owner and buyer price beliefs become more aligned, most notably for development site assets which have seen demand levels more subdued.
3Q 2017
60 auctions
1 passed in
98.33% selling rate
42 SOLD under the hammer
13 SOLD prior to auction
4 SOLD post auction
2017 to date*
179 auctions
16 passed in
91.06% selling rate
120 SOLD under the hammer
25 SOLD prior to auction
18 SOLD post auction
Ray White Commercial Auctions 2017 to date*, Auction Results
Ray White Commercial Auctions2017 to date*, Sold By
The Ray White Commercial network has a firm history of success in the Auction arena keeping clearance rates elevated, 2017 calendar year to date (to third quarter) sales rates were recorded at 91.06% across the total 173 auctions called. Retail and Industrial assets have been the stand out asset class which has transacted with Retail in strong demand given its 94.29% success rate followed by Industrial at 92.73%, while Office assets were not far off representing 88.24%.
During the third quarter 2017, Ray White Commercial has seen a slightly higher Queensland auctions weighting representing 46.67% followed by Victoria at 30.00% and New South Wales with 20.00%. Queensland, NSW and New Zealand all recorded a 100% success rate during this period with Victoria recording 94.44%. The type of property assets put to market has continued the trend seen over the last few years with Retail and Industrial assets dominating the auction rooms with their average sale price this period representing $1.446million and $825,433 respectively. These asset classes have usually been actively pursued by local investors and owner occupiers taking advantage of the low interest rate environment and capitalising on falling yields and rising rents in some locations.
Sold 91.06%
Passed In8.94%
$251.513million, 173 Auctions
Under the Hammer73.62%
Prior to Auction15.34%
Post Auction11.04%
163 SOLD Auctions
In late 2016 and into 2017 there has been some reduction in the number of bidders highlighted a more cautious approach by investors particularly given the strong yield compression felt in a lot of markets over the past couple of years. However, during both the second and third quarters of 2017 we saw these numbers rebound a particularly for Industrial assets, recording just an average of 2.40 during the first quarter now seeing 4.46 bidders during the third quarter, while Office buyers have remained reasonably consistent at 3.50. Retail activity remains high with the average number of bidders recorded at 3.38 while Development Site activity has also rebounded to represent an average of 5.40 bidders. Marketing budgets have been showing upward momentum over the past couple of years as vendors see the value in both digital and print advertising to create competition and market awareness, Development Site campaigns being the most costly averaging $17,891 followed by Office ($8,707), Retail ($8,113) and Industrial ($3,791).
Source: Ray White Group *2017 to September (3Q)
0
5
10
15
20
25
Development Industrial Office R etail
S old Not S old
Source: Ray White Group
0
1
2
3
4
5
6
7
8
9
$-
$2,500
$5,000
$7,500
$10,000
$12,500
$15,000
$17,500
$20,000
$22,500
Development Industrial Office Retail
Av. Marketing Budget No. Bidders (RHS)
Ray White Commercial, 3Q 2017 Auction Marketing Investment & No. Bidders, by Asset Type
Ray White Commercial, 3Q 2017Total No. Auction, by Asset Type
3Q 2017
Average Registered Bidders
4.78 across all auctions
4.81 when sold under the hammer
Average Marketing Investment
$9,249/ auction
2017 to date*
Average Registered Bidders
5.15 across all auctions
5.42 when sold under the hammer
Average Marketing Investment
$7,751 / auction
Source: Ray White Group *2017 to September (3Q)
Ray White Commercial 3Q 2017 No. Auctions, by Location
Ray White Commercial3Q 2017 No. Auctions, by Asset Type
NSW
Vic
Qld
NZ
Development23.33%
Industrial25.00%Office
13.33%
Retail38.33%
Source: Ray White Group *2017 to September (3Q)
Selected Auction Sales
Address Asset Class Sale Price Sale Method
16 Simpson Street, Auburn NSW Development Site $ 4,125,000 Under the Hammer
122 Lahrs Road, Ormeau QLD Development Site $ 1,900,000 Post Auction
29-31 Gem Road, Kenmore QLD Development Site $ 3,980,000 Post Auction
560 Anzac Avenue, Rothwell QLD Development Site $ 2,900,000 Prior to Auction
3513 Main Beach Parade, Main Beach QLD Development Site $ 7,800,000 Under the Hammer
17 Vietnam Street, Inala QLD Development Site $ 1,325,000 Under the Hammer
1 Yandina Road, West Gosford NSW Industrial $ 1,311,000 Under the Hammer
15 Richland Avenue, Coopers Plains QLD Industrial $ 680,000 Post Auction
13 John Duncan Court, Varsity Lakes QLD Industrial $ 520,000 Under the Hammer
36 Lawrence Drive, Nerang QLD Industrial $ 1,400,000 Under the Hammer
11 Mason Drive, Braeside VIC Industrial $ 560,000 Prior to Auction
35-41 Westpool Drive, Hallam VIC Industrial $ 610,000 Under the Hammer
28-32 Buckland Street, Clayton VIC Industrial $ 3,690,000 Under the Hammer
88 Cook Street, Auckland Central NZ Office $ 670,000 Under the Hammer
1 Waugh Street, Chinderah NSW Office $ 720,000 Prior to Auction
23 MacMahon Road, Hurstville NSW Office $ 1,890,000 Under the Hammer
9 Seabank Road, Southport QLD Office $ 3,210,000 Post Auction
Level 7, Icon Place, 270 Adelaide Street, Brisbane QLD Office $ 1,650,000 Under the Hammer
111 Lindfield Road, Helensvale QLD Office $ 595,000 Under the Hammer
187-189 Latrobe Terrace, Paddington QLD Office $ 1,300,000 Under the Hammer
21A Armstrong Street, Ballarat Central VIC Office $ 606,000 Under the Hammer
47 Jonson Road, Byron Bay NSW Retail $ 1,652,500 Prior to Auction
171-173 Carrington Road, Coogee NSW Retail $ 960,000 Prior to Auction
8 King Street, Murwillumbah NSW Retail $ 456,000 Under the Hammer
50 Blair Street, North Bondi NSW Retail $ 3,820,000 Under the Hammer
12 Bourton Road, Merrimac QLD Retail $ 628,000 Prior to Auction
2 Oaka Street, Gladstone Central QLD Retail $ 360,000 Under the Hammer
181 Latrobe Terrace, Paddington QLD Retail $ 1,680,000 Under the Hammer
637 Warrigal Road, Chadstone VIC Retail $ 1,228,000 Prior to Auction
1861 Ferntree Gully Road, Ferntree Gully VIC Retail $ 420,000 Prior to Auction
69-71 Athol Road, Springvale South VIC Retail $ 1,335,000 Under the Hammer
271 Blackburn Road, Mount Waverley VIC Retail $ 1,100,000 Under the Hammer
627 Camberwell Road, Camberwell VIC Retail $ 960,000 Under the Hammer
157 Burwood Road, Hawthorn VIC Retail $ 730,000 Under the Hammer
Source: Ray White Group
The third quarter of 2017 has recorded a slight decline in number of Auctions compared to the second quarter, however this number is close to double the amount seen this same period in 2016.
More encouragingly however is the very high selling rate which has been recorded at 91.06% for the 2017 calendar year to date. With a high volume of Auctions scheduled in
the Ray White Commercial calendar for the remainder of the year, we expect that both the number and sales rate for this year to outperform 2016. A strong weighting to Retail assets this period again emphasises the demand for smaller, low yielding investments with Industrial transactions highly sought after resulting in a strong prior to auction sales rate. With economic conditions continuing to be favourable we expect continued demand for these types of lower (sub $2million) assets through to the end of the year as the rush to complete transactions increases.
41 & 43 Kestrel Street, Inala
An approved medium density development site, situated within the southern Brisbane suburb of Inala.
The sale comprises two adjoining properties which form an 1,325m² irregular shaped inside site zoned “Low-Medium Density Residential (2 or 3 Storey Mix) ”, situated at road height, with an easterly aspect.
The property was purchased with approval, for a 3 storey medium density apartment complex comprising 19 units (15 x 2 bed & 4 x 3 bed), plus a managers residence, with a single level basement car park.
Inala is an established residential located, situated approximately 21 kilometres south of the Brisbane CBD, and is bounded by the suburbs of Richlands, Forest Lake, Durack, Darra & Oxley.
Development within Inala is predominantly characterised by detached residential dwellings of mixed age and presentation. Inala is also home to an established commercial/retail centre known as Inala Civic Centre which is centred on the Woolworths Anchored Inala Plaza.
The property was offered to market via a six (6) week marketing campaign, which generated a total of 28 enquries.
The property was sold under the hammer, to a locally based private developer for a purchase price of $751,000 Ex GST.
All text and information contained within this Case Study is indicative only.
QLD | Commercial | Auction
Sales Analysis*
Vendor: Liquidators Appointed
Method of Sale: Auction
Marketing Timeframe: Six Weeks
Marketing Budget: $14,707
Total Enquiries: 28
Sale Price: $751,000 Ex GST
Sales Date: 07/17
Mark Creevey
Tony Williams
Outline Indi cative Only
88 Chandos Street, Naremburn (St Leonards)
88 Chandos Street presented an outstanding opportunity for investors, owner occupiers and developers to secure a boutique freehold commercial building in the thriving hub of St Leonards.
The property is a three storey commercial building with NLA of 638 sqm* and parking for 11 cars. It also has development potential for shop top housing (STCA) as stated in the Additional Permitted Uses of Willoughby Local Environmental Plan 2012.
The property was subject to fantastic interest with over 60 enquiries on the property. The prospective purchasing pool included Owner Occupiers, Investors and Developers demonstrating high demand for this unique opportunity in the tightly held St Leonards market especially where the opportunity exists for future redevelopment.
Over 10 contracts were issued prior to Auction. The property was sold under hammer.
*Approximate
All text and information contained within this Case Study is indicative only.
NSW | Commercial | Auction
Sales Analysis*
Sale Price $4,350,000 + GST
Land Area 377.8 sqm*
Zoning: Zone - B3 Commercial Core
HOB - 20 metres
FSR - 2.5 : 1
Net Lettable Area (NLA): 638 sqm*
Rate per NLA sqm $6,818 per sqm*
Rate per Land Area sqm $11,514 per sqm*
Net Income (per annum) Vacant Possession
Potential GFA (STCA) 944.5 sqm*
Rate per Unit Site (based on estimated of 11 Units - STCA)
$395,500 per unit*
Sales Process
Sale Date September 2017
Sale Method Auction in Room
Jeff Moxham+61 413 838 [email protected]
Ben Kirby+61 405 770 [email protected]
Samuel Hadgelias+61 403 254 [email protected]
88 Chandos Street, Naremburn
Ray White Commercial
Vanessa RaderHead of Research
_ KNOW HOWResearch
raywhitecommercial.com
Level 17, 135 King StreetSydney NSW 2000
T (02) 9249 3724M 0432 652 115E [email protected]
