Meanwhile, in the second transaction, a Te Puna kiwifruit orchardist purchased a substantial industrial complex in Tauranga for $7.7m.
The multiple tenancies within the industrial precinct generate an annual rental revenue of $509,363 — equating to a yield return of 6.6 per cent.
Local assets soughtBayleys Tauranga commercial manager Mark Walton says the agency is working with five additional property investors from the rural sector.
Two of them are cashed-up kiwifruit growers; two are similarly-funded avocado orchardists and the fifth man is a high net-worth 100 per cent equity-backed dairy farmer.
Each of these investors is looking to buy commercial property assets in the city.
Walton says their unconditional buying budgets, which are specifically for acquiring commercial property assets, range from $1.5m to $6m.
"And all five potential buyers only want commercial property opportunities in Tauranga or Mount Maunganui.
"The Bay's horticultural sector — particularly kiwifruit and avocado production — is delivering record crop value yields, and subsequently land values are at peak," Walton says.
"Some orchardists, particularly those who have owned their properties for more than 10 years and successfully worked through the PSA crisis, are now taking advantage of record prices for productive land.
They are selling up, or leveraging to release considerable amounts of equity.
"Generally, those who have sold up are allocating in the region of $1.5m to $1.9m to buy homes on lifestyle blocks on the city fringe, depositing a similar amount in interest-bearing term accounts, and spending the remainder acquiring investment properties or development sites."
Walton says the buyer of the industrial hub purchased the premises purely as a passive investment, while the Cameron St buyer had taken a longer-term view of the site's redevelopment potential and would take their time formulating the highest-returning land use for the location.
In November, Bayleys Tauranga rural specialist Snow Williams, achieved a $6.135m sale of a six-hectare G3 kiwifruit orchard in Te Puke — equating to $1.18m, per-canopy-hectare of crop.
Golden TriangleThe orchard had been owned the vendor and his family for 21 years. Williams was not involved with either of the commercial property deals.
Sales data from Bayleys Tauranga shows that at least five other big kiwifruit orchard sales, in the Pongakawa, Te Puke and Paengaroa townships, have recorded values ranging from $7.2 million to $12.05 million over the past 18 months — with G3-planted orchards now achieving average sales values of $1m a-canopy-hectare.
Williams says by comparison, avocado orchards are selling for about $300,000 per-canopy hectare.
Walton says much is made of Aucklanders selling up their multimillion-dollar homes, paying off the mortgage, and coming down to Tauranga to buy a new lifestyle debt-free.
"Yet there is another much quieter trend of rural property owners from within the Bay of Plenty doing exactly the same thing with their orchards and farms, but buying commercial real estate assets," he points out.
"As part of the 'Golden Triangle' (bounded by Auckland and Hamilton and Tauranga), the underlying economy of Tauranga is strong and shows no signs of easing. So not only are we seeing investment capital coming into the region, but we are also tracking investment capital moving from one property sector to another within the region," says Walton.
"By being across all property sectors — commercial and industrial, rural and residential — Bayleys has the unrivalled position of being able to truly operating as a one-stop property shop for its customers."
