Properties snapped up on Budget day

A Fruit World outlet in Whangaparaoa attracted spirited bidding. Photo / Supplied

Widely predicted changes to property taxes did not deter investors attending Bayleys auctions on Budget day, and the day before, with all 10 commercial and industrial properties for sale in Auckland and Wellington selling.

Three properties put up for sale at a Bayleys Greater Auckland auction all sold to separate purchasers at a total value of $4.24 million.

A 446sq m Fruit World outlet in a recently developed neighbourhood convenience shopping centre at 15 Karepiro Drive in Whangaparaoa fetched the top price of $1.7 million. Marketed by David Young of Bayleys Auckland and Mustan Bagasra of Bayleys Orewa, it sold at a 7.8 per cent yield on a 10-year lease to the national fruit and vegetable retailer from November 2007.

Young says the unit is situated in a high-profile retail location off a main arterial in an expanding area. It is close to a number of other high-profile retailers such as Mitre 10, Repco, Shell and Wendys.

Attracting good bidding was a 787sq m freehold site in the heart of Greenlane's "car dealer central" at 450 Great South Rd. The Business 4 zoned property marketed by Mike Adams of Bayleys Auckland sold to an investor for $1.5 million, equating to $1906 per sq m.

The property has had only two owners since the early 1950s and has been home to Eade Cars since 1979. There is a modest 72sq m office building to the rear of the site and a small garage/workshop.

"This site has excellent exposure to busy Great South Rd and while historically this precinct has been associated with motor vehicle retail sales outlets, we are currently seeing a changing usage profile as evidenced by the recent opening of a new KFC outlet across the road and a proposed 24-hour gym in the neighbourhood," says Adams.

"Many traditional car dealer strips in high-profile locations are now morphing into broader trade-based retail and showroom usage."

The other property to sell at the Greater Auckland auction was the 330sq m Milestone Bar in the heart of Otahuhu, marketed by Mark and Rachael Pittaway, which fetched $1,040,000 at a 9.1 per cent yield.

The property at 7A Avenue Rd, shares the same car park as a neighbouring McDonald's and TAB, and is directly across the road from the central bus station.

The longstanding tenant renewed its lease for a further 10 years in 2005.

Down in Wellington, Finance Minister Bill English's Budget wasn't the only show in town on May 20 with Bayleys office in the capital putting up seven commercial and industrial properties for auction and selling the lot.

Six of seven commercial properties sold under the hammer, with a further warehouse and office unit selling quickly in post-auction negotiations - at yields ranging from 5.7 per cent through to 9.1 per cent.

Bayleys Capital and Commercial director Rohan Hill said the auction successes highlighted that property still remained a preferred investment option for many small to medium investors..

"It was encouraging to see so much active bidding from the floor at the same time that the Budget was removing depreciation claims on investment property. Ironically, the auction drew the biggest crowd in our Wellington rooms so far this year.

"On analysis, the prices achieved at auction were probably identical to what would have been achieved regardless of the new tax regime."