Newcastle Investments in Demand
A mixed use commercial investment with redevelopment potential (STCA) in central Newcastle has been sold at auction by Ray White Commercial Newcastle for $2 million – $600,000 above the reserve.
The two-level building at 39 Darby Street, Newcastle, was sold under the hammer to a local investor by Ray White Commercial Newcastle’s Lee Follington and Barry Price of Ray White Newcastle Lake Macquarie on behalf of a private owner.
At the same in-room auction a boutique retail investment at 1/295 Darby Street, Bar Beach, was sold to a local investor by Ray White Commercial Newcastle’s Lee Follington and Beau Russell for $1.275 million and a yield of 6.2 per cent.
“The property at 39 Darby St drew strong interest from both local and Sydney investors and the sale price was a tremendous result for the vendor,” Lee Follington said. “We were also delighted to sell 1/295 Darby St under the hammer.”
Ray White Commercial Head of Research, Vanessa Rader, said central Newcastle has experienced strong sales transactions during 2016.
“The prolonged low interest rate environment has resulted in a greater number of investors looking to secure holdings at attractive yields or with development potential,” she said.
“There has been a push into regional markets over the last couple of years as affordability in metropolitan areas made returns unappealing. Prime assets currently range between 5.00 per cent and 10.00 per cent depending on the lease covenant ,however, on average 6.85 per cent which is down 165 basis points over the last three years. Secondary assets have seen a sharper compression in yields now averaging 8.85 per cent, down from 11.25 per cent just four years ago.”