Ray White Commercial Achieves 83% Investment Auction Clearance

Australasia’s largest real estate group Ray White’s commercial property auctions in the March quarter of 2015 achieved an 83 per cent clearance rate for investment auctions, according to the group’s inaugural Auction Insights report.

Ray White Commercial Senior Director Auctions and Investments, Richard Impiombato, said 15 of the 18 investment properties offered at auctions nationwide in the March quarter sold.

Mr Impiombato said investment sale auction transactions were worth a total of $30.203 million, with an average of 5.2 registered bidders per property.

“Passive investment property with the ‘trifecta’ of a long lease, secure covenant and attractive location are in strong demand,” he said.

“The 83 per cent clearance for investment auctions shows how effectively the auction process is to maximise sale prices via bidding competition.”

Ray White Commercial took 55 properties to auction nationwide during the March quarter for an overall clearance rate of 58.18 per cent and total sales of $52.641 million.

“This is a great result and highlights the effectiveness of the auction process,” Mr Impiombato said.

He said of the 32 sold properties, 15 were sold under the hammer, 10 post-auction and seven prior to auction.

Mr Impiombato said notable sales over the March quarter were $12 million for a residential development site at Surry Hills in Sydney and $7.3 million for an investment sale at Cranbourne in Melbourne.

“The larger $12 million sale of the development site echoes our sentiment that auctions work across all price points,” he said

Mr Impiombato said sales of vacant buildings resulted in a solid clearance rate of 53 per cent across 28 properties taken to auction.

“Our statistics show a modest average marketing investment and sale price for these types of assets,” he said.

“This displays the effectiveness of the auction process for what are the traditionally ‘longer time to sell’ assets.

“Auction is often met with resistance from property owners when recommended as the appropriate sale process. These insights provide the evidence that auction will give you the highest price via a competing deadline, in the shortest selling period.”