Diverse offerings enter upbeat market

By Colin Taylor

Demand for commercial property consistent in resilient Auckland.

219-225 Dominion Rd, Mt Eden Photo / Bruce Clarke
219-225 Dominion Rd, Mt Eden Photo / Bruce Clarke

Within the portfolio, 11 will be sold by auction, four are for sale by tender, two are offered by deadline private treaty and another 21 will be sold by other methods. We also have 15 properties for lease.John Urlich, Barfoot & Thompson Auckland remains New Zealand's most resilient business environment, with recent projections in respect of population patterns and growth continuing to drive a consistent demand for commercial property, says John Urlich, manager of Barfoot & Thompson's city commercial office in the foreword to the agency's latest Insite portfolio publication.

"It is also apparent that the current low-interest rate environment is likely to continue for some time yet," Urlich says. "Accordingly, there has been an increase in the number of owner occupiers re-entering the market hoping to capitalise on the attractiveness of debt-servicing relative to the cost of rental payments.

"Not dissimilarly, investors too continue to seek yielding investments that provide secure cash flow against historically low rates of borrowing."

Urlich says the market for all categories of property remains particularly competitive at levels beneath $3 million, with demand to buy especially coming from foreign nationals and new immigrants.

Another point of note is "the 'Christchurch effect" with prospective purchasers keeping a watchful eye on construction specifics as they measure up seismic ratings of properties and the consequent effects on insurance costs and funding feasibility.

Urlich says a feature of the Insite portfolio is the diversity of commercial properties on offer that are evenly spread throughout the region.

"The properties include large industrials in the airport area, Penrose and Mt Wellington; retail properties in Papakura, a 4ha land block at Westgate, a big office/retail investment in Albany worth more than $20 million, an industrial mortgagee sale in St Johns and an office unit in Mairangi Bay," he says.

"Within the portfolio, 11 will be sold by auction, four are for sale by tender, two are offered by deadline private treaty and another 21 will be sold by other methods. We also have 15 properties for lease."

Feature properties to go under the hammer include a standalone character building on a prominent corner site at 219-225 Dominion Rd, Mt Eden.

"This two-level building is fully tenanted and contains six main commercial tenancies and six individually let offices, plus one residential apartment," says Brennan Wyllie, who is marketing it for auction at 1pm on Thursday, November 29, at Barfoot & Thompson's new auction rooms at 34 Shortland St - unless it sells before.

Comprising a building with a 541sq m floor area on a 556sq m site, the property provides the security of a multi-tenanted investment that provides steady cash flow from a mix of retail, commercial and residential tenants, Wyllie says.

"A Business 2 zoning recognises that properties maintaining their viability as commercial centres in traditional suburban areas will be those that either find a niche in a specialty market, like antique shops and those selling second hand goods.

"Or they will be outlets which provide convenience and comparison retailing for a less mobile community and those not well served by the larger comprehensive centres. Other properties will be those for small business operators."

Wyllie says the zoning allows for a wide range of permitted activities including care centres, community welfare and educational facilities, funeral parlours, healthcare services, laboratories, industrial operators, offices, places of assembly, premises for cultural activity, residential units in existing buildings, eateries, retailing, warehousing and workrooms.

Development controls provide for a maximum height of 12.5m, a basic floor area ratio of 2:1 and a maximum floor area ratio of 4:1.

Wyllie says there are few retail vacancies in the area, which is popular because of its closeness to the city. "As a result, retail blocks tend to be relatively tightly held and seldom come on the market."

The brick building was built in the early 1900s in the Edwardian Italianate style. It was purpose-built as a butcher shop, the first suburban outlet for the Auckland Meat Company.

On the ground floor facing Dominion Rd are four retail shops, occupied by Telecom, The Barber Shop, M2 Salon and Goodwin Property Management. Serafin licensed restaurant is at the rear of the site and has frontage to Walters Rd.

The first level has a flat on the city side of the building and the rest of this floor is tenanted by an architect and AMC, in six separate offices.

It generates $235,900 annually from all the tenancies including $5400 from three rear car parks.

A second property to be sold at the same auction is a two-level 352sq m office and apartment building, with a garage and storage area of 14sq m, on a rectangular 312sq m site at 87 College Hill in Freemans Bay.

"This property, zoned residential 7A, is in an excellent city fringe location on College Hill, between the Auckland CBD and the Ponsonby Road shopping precinct," says marketing agent Bill Carlson.

"It has easy access to the Viaduct Harbour and Wynyard Wharf on Auckland's waterfront, and is very close to Auckland Harbour Bridge via motorway on and off ramps."

The front portion of the building comprises one-and-a-half levels of elevated office, with three car parks below. The adjoining rear apartment is a two-level structure with an attached garage for one car and a separate storage shed. There is space to park a further two cars outside the apartment.

"The building appears to have been built around 1980-1988," Carlson says. "Construction generally consists of corrugated iron roofing, stucco on marine ply, corrugated iron and fibrolite exterior walls, concrete piers, aluminium window frames, sashes, gibraltar board interior linings and ceilings, inset lighting, and carpets."

The apartment has a floor area of 126sq m spread over two levels while the office area is 143sq m, giving a total lettable area of 269sq m plus basement car parking of 83sq m.

Insurance Brokers Limited pays annual rent of $47,000 plus GST on a four-year lease with a final expiry of February 7, 2016.

The second tenant, Aharon Yeal Hacochen, pays an annual rental of $35,652 on a one-year lease with a final expiry September 18, 2013.

The site has a street frontage to College Hill of 10.33m and a depth of 30.58m.

A third property to be auctioned on November 29 via a mortgagee sale is a vacant industrial complex at 22 Hannigan Drive, St Johns, which most recently was occupied by a major national brand bakery operation.

"The ANZ bank as first mortgagee is selling the land and buildings as is, where is," says marketing agent Paul Gilberd.

"In essence, this is a freehold, affordable, centrally located, vacant food manufacturing facility," he says.

"The property and its location make it well suited to owner occupiers and we are strongly advising food-related businesses to have a good look at this place."

The property has a total enclosed area of 1496.68sq m including a 1124sq m manufacturing area, offices and amenities of 273.55sq m and plant rooms of 61.96sq m, with a covered canopy and detached shed.

"There has been a significant investment in the installation of cooler and freezer units, along with graded draining floors and food grade electricity and lighting on site," Gilberd says.

"This is complemented by vehicle ramps, covered loading areas and roller door access with plenty of on-site parking and good local industrial labour supply. The building has a current warrant of fitness expiring September 22, 2013."

Gilberd says the complex was developed to be an all-in-one business administration and operations, storage and logistics centre with the proportions of space allocated to each function having served the occupants well over the years.

"It is a single-level substantial industrial building dating from the 1980s with the majority of the non-office space specifically fitted out to accommodate food processing.

"The building has a suspended ceiling and stud of about four metres.

The single level of office space faces on to Hannigan Drive with the floor area dedicated to office being less than 20 per cent of the total available floor area.

"There is flexible mixed-use business activity 4 zoning in place and easy access to Morrin Rd with access to the State Highway One at Penrose and Mt Wellington," Gilberd says.

- NZ Herald

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