A NSW investor has bought a Fortitude Valley Emporium retail asset for $1,703,000 at an auction dominated by interstate buyers as Queensland commercial investments continue to lure southern-state interest.
Ray White Commercial Queensland agent Michael Feltoe, who took 18/1000 Ann Street to auction, says four of the five registered bidders were from NSW.
“The widely documented trend of southern-state investors targeting Queensland to take advantage of comparatively higher yields is one we are seeing continue,” Mr Feltoe says.
“Investors were attracted to the unprecedented growth that both Fortitude Valley and Brisbane are undergoing with $28 billion of infrastructure that is currently under way and proposed.
“The $40 million sale in January of the Emporium Hotel also boosted investor confidence in the precinct.
“Despite consistent commentary about the headwinds facing the retail market, we are continuing to see high levels of inquiry for long leased inner-city retail investments.”
Four of the five registered bidders participated in the May 4 auction, which kicked off with a starting bid of $1 million. A total of 17 bids were placed.
“Once bidding slowed, the vendor put the property on the market at the $1.68-million mark which kickstarted the pace,” Mr Feltoe says.
“Bidding increments reduced as two parties competed and a $5000 bid saw the hammer fall at $1,703,000. Both the purchaser and underbidder were NSW-based investors.”
The tenant is on a new five-year lease until 2023 with options until 2038. With a net income of $130,000* per annum, the yield is circa 7.6 per cent, Mr Feltoe says.
The 182sqm property is fully fitted out as a restaurant and trades as Choices Chinese Cuisine.
The Fortitude Valley Emporium mixed-use development is 1.5km east of the Brisbane CBD.
Mr Feltoe says the vendor is a private investor, also from interstate. Fifty-five inquiries were received during the campaign.
The auction was held at Ray White Commercial’s 111 Eagle Street head office.
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