THE value of commercial real estate in Wonthaggi, especially properties with a secure rental return, was underscored last Wednesday, November 1 when two CBD sites went under the hammer.
And investors really got their engines revving, at the Burgess Rawson regional real estate auction at Crown Casino in Melbourne, when prominent automotive outlet, Wonthaggi Tyrepower in Watt Street, was up on the block.
Burgess Rawson representative Raoul Holderhead could not have been more delighted with the result.
“We had some local interest there on the day, which was good to see, but ultimately the property was sold to Melbourne investors for $1.355 million, representing slightly better than a 6.6 per cent return on investment, which is an excellent result.”
The investors must have had their calculators handy because they paid almost exactly the same return-on-investment ratio for two shops, auctioned as one, in Graham Street, on the same day.
“We had a couple of offers above the $900,000 mark for that property before the auction but it sold for $975,000 on the day, again just slightly better than a 6.6 per cent return.
“It shows that interest in Wonthaggi is still phenomenal really.
“Anything that’s got a secure rental return is in demand and you’ve also got the situation where those two properties are in the sweet spot for most people, between the $800,000 and $1.2 million mark, or just a bit more than that in this case.”
Mr Holderhead, who started out in the real estate game locally in South Gippsland but now operates a regional real estate broking business in Melbourne, said the two shops were bought by an investor who owns a holiday house at The Gurdies.
“He was down there, took a look at the properties while he was there on the weekend, and ended up buying them,” Mr Holderhead said.
The Tyrepower site is securely let to local tenants, who only recently renewed a 10-year lease with a five-year option through until 2030.
The immaculate 1011m2 CBD corner allotment with a well-maintained 271m2 building, so good in fact that it’s used by Tyrepower in its TV commercials, returns rent of $90,327.38 pa with fixed 3 per cent increases.
The shops at 144-146 Graham Street, also securely let to established tenants The Noodle Canteen and Gusto Gelateria, return a combined rent of $64,523 pa.
Bidders burn rubber at $1.355m ’Thaggi auction