$3M commercial property sale shows confidence in region
A PRIME piece of Rockhampton commercial property has sold at auction in Sydney as confidence in regional investments continues to grow.
The Siemens building at 292-296 Alexandra St in Kawana attracted four bidders at Wednesday's auction, selling to a Gold Coast-based private investor for $3.3million.
Marketing agent, Burgess Rawson sales director Glenn Conridge said the 6,121sqm site offered a net income of circa $265,000 pa + GST, as well as offering 3 per cent annual rent increases.
"This property underwent $5million in significant capital improvements last year, underpinned by a financially committed international public company tenant," Mr Conridge said.
"The buyer was attracted to the strength of the tenant, the new lease and the work they had undertaken at their own expense."
The other bidders at auction were from Sydney and Melbourne, also private investors buoyed by the strength of the regional economies.
According to Mr Conridge, investors are comfortable with Rockhampton as a city to invest in as they see the economy become stronger, having turned the corner.
"We're seeing that kind of strength in all the major regional areas," he said.
"The regions are yielding a little bit better than metropolitan areas and that's a factor for investors who like a higher return but still with quality tenants."
Bidders for the Kawana property were all private self-managed super fund investors which make up a major portion of the commercial investment market, up to $5million.
"They are getting low returns on cash investments and are attracted to the higher returns and growth from rental increases," Mr Conridge said.
"Siemens had 3 per cent annual rent increases and the tenant pays all the outgoings, like rates and land tax.
"We see the future continuing to improve as the price of coal increases and a new belief in the Adani project proceeding, which will add significant jobs and income streams to the Rockhampton economy."
Another property, at 92 East St in Rockhampton, was withdrawn from auction but Burgess Rawson is in negotiations with multiple parties and confident the property will sell.