Buyers fight for historic bank in Gundagai leased to the same tenant for 138 years
A regional bank branch leased to the same tenant for 138 years has sold under the hammer for $592,000 on Tuesday – $112,000 more than its reserve price.
The property at 201 Sheridan Street, Gundagai, 95 kilometres west of Canberra, has been occupied by the National Australia Bank since 1880.
It sold on a yield of 5.61 per cent, which Burgess Rawson selling agent Guy Randell called a “phenomenal result”.
“Regional assets like that normally don’t sell up for that type of yield, it’s generally around that 7 per cent mark or even higher,” said Mr Randell, who had the listing with Sam Horwitz.
Currently leased to NAB until October 2020, he attributed the popularity of the listing, which received 125 inquiries and 32 contract requests, to the price.
“When we’re talking about that half-million-dollar property range, that’s really, really attractive for a lot of people who haven’t got the money to buy larger sites,” Mr Randell said, adding that buyers were mostly mum-and-dad investors, small super funds and private individuals.
The 298-square-metre property on a 914-square-metre block was one of 16 assets to go under the hammer at Burgess Rawson’s Sydney portfolio auction, which recorded a clearance rate of 83 per cent on the day.
Three properties passed in and two are under negotiation, Mr Randell said.
Seven bidders battled it out for the two-storey Gundagai building, with the bidding starting at $390,000. After 20 minutes a phone bidder from Melbourne made the winning bid. The vendors were a private syndicate based in the town.
Another bank-leased property in Sydney’s Redfern was the first to sell at auction on the day for $4.1 million on a 3.95 per cent yield. That was expected to sell on a yield of about 5 per cent.
“I thought today was the strongest (portfolio auction) we’ve experienced in 12 months; the sentiment was very, very high. It really showed that people have been waiting to invest this year,” Mr Randell said.
He added that the instability in the share market also contributed to the confidence in commercial property.
“Obviously with the share market issues going down, the volatility of that at moment has helped people in the commercial (property) sphere as well.”
