Commonwealth Bank’s Lilydale premises prove a cash cow at auction

Larry SchlesingerDecember 7, 2020

A Melbourne-based “passive” investor has paid $480,000 above the reserve to acquire the Commonwealth Bank’s Lilydale premises for $2.88 million as part of a Burgess Rawson portfolio auction. 

The sale at a 20% premium to the reserve price demonstrates the appeal of well-located bank premises with secure ASX-listed tenants. 

The property was last acquired for $1.75 million by a Lilydale-based investor less than five years ago, representing annual capital growth in excess of 10%. 

“It’s a sweet return when you add in the annual rent as well,” says Burgess Rawson’s Billy Holderhead. 

The recently refurbished two level 630 square metre building with two ground floor ATMs is rented by the Commonwealth Bank for five years with renewal options to 2025. 

The bank pays annual rent of around $129,000 per annum equating to a “very strong” yield of 4.49%. 

It was marketed by Raoul Holderhead and Jamie Perlinger of Burgess Rawson. 

At a Burgess Rawson portfolio auction in April, an investor paid $1.41 million at auction yesterday for the 491 square metre premises of the Commonwealth Bank on a corner site in the Swan Hill CBD in the Murray River region. The sale represented a yield of around 7% for the buyer. 

Another bank branch, the NAB outlet on Sydney Road in Kilmore, bringing in annual rent of around $39,000, sold for $800,000 to local investor after it was passed-in on a vendor bid of $820,000 – a yield of around 5%. 

In April, an ANZ bank branch in the Victorian heritage country town of Korumburra in South East Gippsland sold at auction today $462,000 well above pre-auction hopes of around $325,000 with bids starting $300,000. 

There were around six bidders and the property sold on a yield of around 5.2%.

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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