Loaded interstate investors buy Gladstone motel for $2.36M
THREE Sydney investors have snapped up a Gladstone motel for $2.36 million at an auction this week.
Burgess Rawson sold The Gladstone Palms Motor Inn at a portfolio auction on Tuesday to the syndicate of investors hungry for a bargain.
The motel sale had the highest yield at the auction out of the 21 properties that went under the hammer, at 12.59 per cent.
But the sale was almost $600,000 short of the $2.9m price tag the motel was sold for in 2006.
Sales and marketing executive Katherine Lucas said Gladstone's affordable real estate market made it an attractive property for interstate investors.
"A 12.59% yield is very high and for this property it's because of the location," she said.
"Gladstone's experiencing a bit of a low in terms of the economy.
"While it will eventually pick up again, (the economy) is the main reason for this price drop."
According to Burgess Rawson the new owners can expect a net income of $297,013 per year.
She said Sydney, Melbourne and Brisbane investors are increasingly looking for regional buys, because city properties are now seen as too expensive.
There were three bidders keen to snap up the motel, but a price of $2.36 million was the ultimate winner.
Ms Lucas said there were "about half a dozen" bids.
The Far St motel has 36 rooms, a licensed restaurant, swimming pool, conference room and three-bedroom managers' residence.
Burgess Rawson, a commercial real estate company, launched the sales campaign for the motel on March 3 this year.
It was advertised on commercial property sites, as a motel on a busy highway, near KFC, Red Rooster and Gladstone Central Shopping Centre.
It also described Gladstone as a "major industrial hub with two of the world's biggest alumina refineries and Queensland's largest multi-commodity port".
At June 30, 2016, the land value at 30 Far St was valued at $700,000 according to RP Data.