Login
iscover
While auctions are considered an unconventional method when it comes to divesting commercial properties, it’s proving to be a winning strategy for sellers in Sydney’s Inner West and South.
Luke Smith, the director of Raine & Horne Commercial Inner West/South Sydney, said the selling method works “superbly well” in the market because properties in the area attract multiple buyers.
“There is a time and a place for all methods of sale, whether it’s auction, private treaty or expression of interest (EOI). However, in this market, auctions have a role to play as they deliver higher-than-expected prices for vendors,” he explained.
He highlighted other benefits of putting commercial properties under the hammer, such as providing bidders with “a transparent and open competitive environment” and an “immediate and unconditional sale”, as contracts must be exchanged once the gavel comes down.
Mr Smith said the market for industrial sales and leasing is robust in Sydney’s inner west and southern region. “Industrial yields are 4.0 per cent to 4.5 per cent, and good properties will achieve outstanding results,” he stated.
Letting the numbers do the talking, Mr Smith cited three recent commercial transactions that recorded outstanding sales results after choosing to sell their assets by auction.
He highlighted the sale of a trophy property, tenanted by an iconic Eastern Suburbs gym at Coogee for a whopping $16.8 million, which was achieved with the help of the auction method.
Right from the start, he revealed that the superbly located retail asset saw 256 enquiries, while 43 contracts were issued.
The bidding wars that ensued among 15 eager bidders during the auction pushed the price significantly above the reserve price.
Mr Smith also shone the spotlight on the auction of an industrial building in prime position in flexible B7 business park zoning in Marrickville, which fetched a $3.12 million sale price under the hammer.
The final price tag on the property was $220,000 above reserve, Mr Smith revealed, after interest from seven qualified bidders fiercely competed for the property during what he described as “a spirited auction”.
The property also attracted almost 15,700 views online and 160 buyer enquiries, while 17 contracts were issued.
By using the auction method, Mr Smith said that a new record has been set for industrial commercial real estate transactions in the highly sought-after Carrington Centre, Marrickville, with the recent sale of the property located at 1/49 Carrington Road for an impressive $9,565 per square metre.
“The established home for popular specialist coffee roasters, Double Roasters, the property is ideally positioned a short walk from two train stations and arterial roads and just seven kilometres from Sydney’s CBD,” he stated.
Never miss a beat with 
Stay across what’s happening in the Australian commercial property market by signing up to receive industry-specific news and policy alerts, agency updates, and insights from reb.
Subscribe to reb Commercial:
Newsletter
