Asians buy up Strand Arcade

By COLIN TAYLOR

Asian investors are continuing to buy into Auckland City's retail property market, including shops in the Strand Arcade at 237 Queen St.

The New Zealand-based Asian investors have spent more than $10 million on four investment blocks in the city arcade.

Two blocks of shops at the Elliott St end of the Strand Arcade, with six and four tenancies respectively, sold for close to $2 million each.

A block of shops with five tenancies at the Queen St end of the arcade sold for $3.25 million.

Another block with four tenants and Queen St frontage fetched close to $3 million.

Chinese-speaking agents James Chan and Jonathan Chang, based in Bayleys' central Auckland, sold the properties with income yields of around 8.5 per cent.

Along Queen St from the Strand, Asian businesses have taken up most of the vacant space in the Mid City Centre, which housed a Multiplex cinema complex.

"A few years ago the building was largely empty - now it's like a little Chinatown and is really buzzing," says Chan, who recently sold a large vacant central city building to a Chinese supermarket chain.

Chan says local Asians, many recent immigrants from Taiwan, South Korea, Hong Kong and mainland China, are very active as both investors and owner occupiers in Auckland's CBD. Overseas investors are also continuing to look for opportunities in the commercial property market here.

"Asian investors are most comfortable with retail investments because they generally offer a high-profile location and tenant," says Chan.

"They don't trust equities, and while income returns for prime retail property have come down because of the increased competition, they are still well above the returns available from similar types of property in most Southeast Asian cities."

He says Asian investors also like buying properties tenanted by other Asians because in most cases they can comfortably communicate with them.

They are also very active in the owner-occupier market, buying up empty premises where they can set up businesses.

It is not only the CBD that Asian investors focus on.

Jonathan Chang, another multilingual Bayleys salesman, says they are also keen on well-located retail properties in growth areas outside Auckland City.

A property being auctioned by Bayleys in Northridge Plaza, in rapidly developing Albany, sold last week for $2.1 million.

The foodcourt, with six tenants on six to eight-year leases, was bought by a locally based Korean investor at a 9.2 per cent yield.