In an unusual step, three Henderson freehold commercial properties are being offered for sale by auction in Henderson with declared reserves.
The properties at 8, 10 and 14 Heremai St are being marketed for sale by Greg Clarke and Ashley Masters of Barfoot & Thompson Commercial.
They say that the properties are good examples of buildings in a secondary location representing great value for money.
"While location, location, location may be the catchcry for many investors, along with access to motorways, the premium prices asked may be unachievable for some businesses and affordability is often of far greater importance," Clarke says.
All three properties have declared reserves well below both their capital valuations (CVs) and the purchase price paid by the vendors in 2004. He says the declared reserve method of selling at auction gives buyers a known level at which they can secure a property.
They will be offered for sale by at Barfoot & Thompson Commercial's auction rooms in Kitchener St at 10.30am on Wednesday, October 3, unless they sell before the auction. At a declared reserve auction, the auctioneer will call for an opening bid at the reserve price. If there is only one bid at that price the property is sold.
Clarke says 8 Heremai St is a modern road-front building of 1014sq m and 14 car parks.
The established tenant, Birch Haberdashery and Craft, has been there for 10 years and has a new four-year lease expiring in May 2016 with two rights of renewal.
The concrete block and iron-roofed building, with showroom and warehouse space on the ground level and offices above, returns an annual rental of $70,000, which will rise to $76,677 a year next June.
"At the declared reserve of $800,000 this freehold property is well below the CV of $950,000 and is clearly realistically set to the market," Clarke says.
"The freehold building for sale at 10 Heremai St is a vacant former print facility and represents even better value for money.
"The most amazing thing about this property is that the vendors would consider selling it so cheaply."
Situated on a 3745sq m site, the building has a total floor area of 2958sq m, comprising a mix of office space over two levels, a high-stud warehouse, and a factory area with a suspended ceiling which could easily be removed.
A big power supply permits various options for use and, being on two titles could allow for separating and selling part of the property.
"At the reserve of only $1.6 million it is a massive $300,000 below its CV.
"And, if budget is the determining factor in total floor space, this facility would be very hard to beat."
Clarke says the property would suit someone who needs a large space, isn't focused on exposure and is looking for a bargain.
"With very motivated vendors this could well be sold at the reserve prior to the auction date."
The third building, at 14 Heremia St, is a 944sq m medium-height warehouse with office space on a 1215sq m freehold site.
The property is leased to Tegel Foods for two years at a rental of $51,000 with the lease expiring in June 2014.
"The lease allows for a three-month notice of termination so this could be suitable for an owner-occupier if required," Masters says.
"It is clearly another bargain, being offered at well below its replacement cost at a CV of $1.3 million and a reserve of only $700,000."