Commercial property agency Burgess Rawson has reported nearly $1 billion in total sales across the 2019/2020 financial year, with essential services making up more than two-thirds of the transactions

The company's 2019/20 Investment Sales Report shows 300 total sales nationally, with a combined value of $939.7 million, up $55.4 million from last year.

Of the 300 national sales, 218 transactions were for essential services, with a combined value of $742.12 million.

Burgess Rawson Melbourne Managing Director Ingrid Filmer said commercial property was, without a doubt, the investment class of choice for a disruptive economic environment.

Burgess Rawson's socially distanced auction in Melbourne. Source: Burgess Rawson

“It was a year of extraordinary generational events for our nation – bushfires, negative CPI, lowest interest rates and a global pandemic for good measure,” she said.

“However, commercial property has come out on top with relatively low to no impact.”

Burgess Rawson sales data shows that despite the challenges, heavy investor demand for properties that showed resilience and defensive qualities prevailed.

“Investors were introduced to a new rule book with added complexities and challenges, leading to defensive attributes proving most popular,” said Ms Filmer.

“Recent sales of properties leased to tenants in essential service sectors demonstrates that there has been no COVID-19-related price deterioration.”

Despite the pandemic impacting States in different ways, and therefore triggering varying restrictions, Ms Filmer said data showed investors were confident making cross border transactions for quality properties, even without a physical inspection.

“Restrictions changed the way we did business,” she said.

“As demand remained high throughout the year, purchasing behaviour adjusted with the use of virtual property inspections and online bidding.

A 7-Eleven at Coomera was sold by Burgess Rawson for $5.5 million at a yield of 5.2 per cent.

“Consequently, the negative market commentary regarding property assets, transaction levels and price stability were proven wrong with 38 per cent of property selling in the last five months of the year.”

Ms Filmer sadi many businesses in essential service sectors, namely supermarkets, childcare, and fast food, had benefited from community lockdowns and large-scale workplace shifts from offices to work from home.

“With hits to superannuation and the share market, Australians are seeking the security that ‘bricks and mortar’ provides," she said.

"The fundamentals of commercial property fit the bill, particularly with essential services investments that have proven dependable during COVID-19.

“We expect investors will continue to diversify their portfolios to include defensive investments that can perform in a post-COVID world.”

Click here to download a copy of the report.

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