Despite the Hawke's Bay commercial real estate market being well down on the 2007 market peak, investors have been signing big cheques in Hawke's Bay.
This year has seen the sale of Hastings properties The Warehouse at The Park Megacentre and The Plaza (principal tenant KMart) in Hastings for $13.4 million and $18.5 million respectively.
The Plaza has sold three times since 2003 previously at $15.9 millon and $17.5 million (2004), with changes to the parking area.
This month NZX-listed property company NPT announced the unconditional sale of its Ocean Boulevard property in Napier for $4.521 million, with settlement due to take place tomorrow.
In September a block of large retail shops in Napier's Thackeray St sold for $8.3 million to a Bay of Plenty-based investment company.
Farmers will open a new 5500sq m store on Hastings St in Napier early next year after the successful opening of its Hastings store in July.
Property analysts Turley & Co's Commercial & Industrial Property Metrics report shows commercial-industrial property sales that peaked in the fourth quarter of 2007 at $1047 million were 68 per cent lower 4.25 years later at $33.4 million. The number of transactions peaked at 58 in the fourth quarter of 2007 reducing 41 per cent to 34 by the first quarter of this year. "But that was one hell of a peak," Mr Turley told Hawke's Bay Today.
He said recent sales multi-million dollar sales reflected the quality of the properties and that investor confidence "of significant sums" was a good sign for Hawke's Bay.
The report said building seismic reports were "generating market activity that would otherwise be lacking and principally led by tenants, thus creating opportunities across the market".
Real Estate firm Colliers International said in its annual retail report that top tier retail locations had experienced a modest lift in rental incomes, while the demand for secondary space had been weak.
It said momentum in the Hawke's Bay market should continue next year and prime yields "should remain solid".
Yesterday NPT announced a pre-tax profit of $9.1 million for the six months to September 30, compared with a loss of $12.9 million for the same period last year.
NPT's chief executive Kerry Hitchcock said the strong pre-tax profit figure was partly attributable to the rise in value of the NPT's property portfolio.
NPTs weighted average lease term rose from 3.4 years in March 31 to 6.2 years at September 30 2012, a rise significantly helped by the extension of Wattie's lease on its Hastings 50,000sq m national distribution centre to 15 years.
The warehouse, on the outskirts of Hastings city, has increased in value from $24.75 million in March to $27 million (9.1 per cent) over the six-month period.
A plan to build a 16ha food processing and distribution hub next door to the warehouse was approved by Hastings District Council, conditional on evidence to show demand, with it being built on protected Plains zoned horticultural land.
The "food hub" is expected to cost up to $50 million and ultimately provide hundreds of jobs.
The project is been driven by Elwood Road Holdings.