Investors, owner-occupiers to fore

By Colin Taylor

11 Pleasant View Rd
11 Pleasant View Rd

Investors and owner-occupiers were out in force for Bayleys' latest Total Property auction, with 10 listings selling at or before auction for a total of more than $13 million.

Two of the larger sales of the day were to religious organisations, which bought substantial club premises offering large vacant low-rise buildings and substantial areas of parking space.

A 2481sq m building on a prominent 1608sq m site on the corner of Atkinson Ave and Avenue Rd in Otahuhu, occupied by the Otahuhu Workingmen's & Cosmopolitan Club since 1962, was sold to a church group with vacant possession for $2.25 million through Noel Rogers, Bayleys Manukau.

The sale also included 2529sq m of vacant land across the road, sealed and security fenced and with parking capacity for up to 100 cars.

Another religious organisation bought a 1092sq m commercial building, which has housed the RSA since the mid-1990s, on an 1801sq m site at 11 Pleasant View Rd, Panmure, for $1.275 million.

The property, sold by Dave Stanley and Ben Bayley of Bayleys Manukau, also has a substantial amount of carparking at the front of the building, which covers only about half of the site.

Chris Bayley, Bayleys Real Estate's general manager of commercial and industrial, says both club premises are bigger than are now required by their organisations, which will be looking at future options better suited to their members' needs.

"At the same time, we have religious organisations which are expanding but finding it difficult to secure premises that suit their requirements - which are for buildings with large open-plan floor areas with lots of parking close by."

Also attracting plenty of interest at the auction was a vacant 609sq m standalone industrial building on a 759sq m site at 67 O'Rorke Rd, Penrose, which sold for $765,000 through James Hill, James Valintine and James Chan, of Bayleys Auckland. Valintine said it attracted more than 50 enquiries, mainly from owner-occupiers, but also from some investors.

The building comprises 359sq m of high-stud, clear-span warehousing, a 122sq m showroom, and 128sq m of office. "Demand is definitely outstripping supply at the moment for industrial premises in this size range in sought-after locations, like Penrose," says Valintine.

"Historically low borrowing costs mean business are finding cash-flow benefits in property ownership, rather than paying rent."

Retail properties were also once again in strong demand at the Total Property auction, with two that offered a combination of retail and residential tenancies selling at yields of less than 6 per cent.

The strongest bidding of the day was for a character building at 1196 Great North Rd, in the heart of the Pt Chevalier shopping precinct, which was on the market for the first time in nearly 60 years.

Marketed by James Chan and Quinn Ngo, of Bayleys Auckland, the standalone two-storey building, comprising two ground-level retail outlets and a first-floor four-bedroom refurbished flat, sold for $1.055 million. Bidding began at $700,000 and progressed in $25,000, $10,000 and then $5000 bids before the property was declared on the market at $985,000 by auctioneer Richard Valintine. A total of 14 further $5000 bids followed before the hammer finally came down at a 5.9 per cent yield on the sale price.

Chan says the property attracted considerable competition because of its prime position within the thriving Pt Chevalier retail precinct.

"It's located in one of the best spots in Pt Chevalier, adjacent to a McDonald's restaurant and a newly built KFC.

"The property also has a good spread of tenancy risk across commercial and residential occupants, with the refurbished residential premises providing a good standard of spacious, modern living accommodation."

Anchor tenant, Lab Tests, has an eight-year lease from September 2009 which produces about half of the property's income, with Dolce Vita cafe being the other ground-floor tenant. The building is on a 500sq m site and has five carparks at the rear.

Also selling under the hammer, through Nicolas Ching of Bayleys Auckland, was a 148sq m partially converted single-level villa on a 253sq m site at 96-98 Richmond Rd, Grey Lynn. It went for $970,000 at a 5.8 per cent yield. The building was built in the early 1900s and has been subject to various additions made over the years. It has a retail tenancy with a strong profile on to busy Richmond Rd and two self-contained one-bedroom flats at the rear.

Boutique retailer Romantique has exercised the first of two two-year rights of renewal on its lease, which is producing half of the property's total rental income.

Ching says the property has been well maintained and there is opportunity to add value.

It is next door to a Trelise Cooper fashion clothing outlet store and there are a number of other similar character shops along Richmond Rd.

Ching also joined forces with Quinn Ngo, of Bayleys Auckland, in the sale for $1.1 million of an 880sq m two-level building at 3091 Great North Rd.

It has three retail shops at ground level and four commercial tenancies above, mostly on short-term leases. It sold at an 8.45 per cent yield.

The building is on a 1012sq m site with 11 on-site carparks at the rear.

Ngo says there is an opportunity to add to the building incorporating this under-used land area. He says the property is well positioned within the Merchants' Quarter, which is part of the retail hub of New Lynn, with many national retailers operating near the property.

Further south, a 415sq m Tonys Tyre Service outlet on a 1037sq m site at 67 East Tamaki Rd, Papatoetoe, sold for $820,000 at a 7 per cent yield through Tony Chaudhary and Ben Bayley, of Bayleys Manukau.

The property has a three-year lease to Bridgestone New Zealand until October 2014, with two three-year rights of renewal.

Other properties to sell included:

A three-level 985sq m office building on a 558sq m site with 19 carparks at 29 East St, Auckland Central, and leased to a variety of tenants, was sold by Alan Haydock and Cameron Melhuish, of Bayleys Auckland, for $1.9 million at an 11 per cent yield.

Unit 3, 49 Sainsbury Rd, Morningside, comprising a 494sq m office and warehouse unit, was sold by Clint Barber and Katrina Riedel, of Bayleys Auckland, for $1.181 million at an 8.9 per cent yield. It has an eight-year lease from 2009 to Signature Marketing, with two-yearly rent reviews and an eight-year right of renewal.

- NZ Herald

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