The former New Plymouth Post Office was purchased by a private New Zealand investor
A record number of bids on a North Shore warehouse in need of remedial work, sub-five per cent yields on several Auckland retail offerings and one of New Plymouth's largest ever commercial sales were features of Bayleys' latest round of Total Property across the North Island.
More than $32 million of sales were recorded at auctions held in Auckland, Tauranga, Hamilton and New Plymouth.
In Auckland, the sale that had every one talking and valuers scratching their heads was a "tired warehouse" in sought-after Porana Road - which is said to be Wairau Valley's premier address - marketed by Trevor Duffin and Alex Strever of Bayleys North Shore Commercial.
The 700sq m warehouse on 1791sq m of land at 60 Porana Rd, with a month-to-month tenancy producing net income of $5250, attracted three registered telephone bidders and multiple bidders in Bayleys' central Auckland auction rooms.
It sold after close to 200 bids for $1,880,000 at a land and building cost of nearly $2700 per sq m and at an income yield of 3.35 per cent.
Bidding started at $1,000,000 and the property was declared "on the market" by auctioneer Richard Valintine after just 11 bids at $1,300,000, indicating it had exceeded the reserve price set by the vendor. In what is thought to be a record for a Bayleys commercial auction more than 180 further bids followed which added a further $588,000 to the final sale price.
"We had three or four very determined bidders competing hard pretty much right to the end, with long sequences of $1000 bid increases interspersed with occasional jump bids of $2000 and $5000," Valintine said. "Understandably, we had a delighted vendor when the hammer finally came down."
Trevor Duffin said bidders included a mix of neighbouring property owners, other owner occupiers in the Wairau Valley and "add value" investors looking to increase the building's rental income by dividing it into multiple tenancies.
"The building is in need of some remedial work but bidders were prepared to look past that because of the strength of the location. Porana Rd is the Wairau Valley's most popular industrial address and any vacant space is quickly snapped up.
"It attracts occupants because of its proximity to the Tristram Ave motorway interchange, the ease of access to properties in comparison with busier Wairau Rd and because of its good mix of tenants, a number of whom provide services to other businesses in the street."
The Porana Rd property was one of two Wairau Valley properties to sell at the Auckland Total Property auction. Also marketed by Strever and Duffin, a 616m² industrial unit nearby - at 57 Hillside Rd - sold for $1,090,000 with a $6,500 month-to-month gross lease in place.
Strever said it didn't attract the same frenetic bidding as Porana Rd but was an interesting sale because it was purchased by a group of Buddhists intending to convert it into a place of worship. "They were also attracted by the property's proximity to the Tristram Ave motorway, the good amount of offstreet car parking at the front of the building and by the fact that it could be reconfigured fairly easily to suit their requirements.
"Auckland's increasingly diverse range of religious groups means there has been something of a shift away from traditional church buildings as places of worship which has opened by opportunities for commercial and industrial property owners. Bayleys North Shore Commercial also recently sold the former North Shore Cosmopolitan Club in Albany to a church group."
Former CPO
The largest sale, of the former Central Post Office building in New Plymouth, was made the day prior to the Bayleys Auckland auction.
Located on a 3070 sq m CBD corner site, at 21 Currie St, the three-level building which has been converted into a hotel and retail building was sold for an undisclosed price well in excess of its 2013 Capital Valuation of $9,325,000 through Paul Dixon, head of Bayleys Tourism, Hotels and Leisure division, Alan Johnston of Bayleys Taranki and Michael Nees, Bayleys North Shore Commercial.
The fully-leased property is anchored by a Quest Serviced Apartments hotel on a 20-year lease from 2008 with 40 serviced apartments on the upper two levels, with ANZ Bank, NZ Post/Kiwibank and Kathmandu occupying the ground floor on varying leases.
It is producing net annual rental income of about $1,100,000.
Dixon said it was one of the largest properties to be sold through the auction method of sale in recent years and was a very substantial sale for New Plymouth. It was purchased by a private New Zealand investor.
Strong demand for a variety of retail offerings was also a feature of the Bayleys Auckland auction. Agents from Bayleys International Division were involved in three of these, two of them at yields of less than 5 per cent.
Bayleys international sales manager James Chan said the sales were in the popular under $1 million price bracket where demand continues to outstrip supply for well-located retail premises. "This sector of the market is particularly popular with local Chinese buyers and we are getting some very good results for our vendors as a result."
The lowest yield of 4.25 per cent was achieved for a small 77sq m unit in the Oates Rd shopping centre in Glen Eden which sold for $635,000 after more than 70 bids through Oscar Kuang and Quinn Ngo. Kuang says the property is well located next to the ANZ Bank and occupied by a well-established local bakery tenancy on a new six-year lease.
Bidding stated at $400,000 and it generated strong bidding competition before being declared on the market at $552,000. More than 50 further bids followed, many of them $1000 increases, before it eventually sold under the hammer.
Kuang, in conjunction with Matt Lee and James Chan, was also involved in the sale of a block of suburban shops with three tenants at 63 New Windsor Rd in West Auckland at a 4.4 per cent yield. The 188sq m building on a 180m² corner site is fully leased to the Sweetie cafe, a laundromat and First Point Electrical which uses its unit as showroom and office space. The property was passed in at the auction for $890,000 but sold two days later for $936,150.
Ngo also sold a 110sq m Chinese restaurant in the Sommerville shopping centre at 90C Whitford Rd, for $715,000 at a 5.7 per cent yield.
Other retail properties to sell at the Auckland auction included:
● A 254sq m two-level 1930s' building recently strengthened and refurbished on a 223sq m site at 16-18 St Johns Rd, Meadowbank sold for $2,302,000 at 5.2 per cent yield on estimated total potential rental of $120,000pa through Cameron Melhuish and Andrew Wallace of Bayleys' Auckland City & Fringe team. The property has a liquor store and seven-day-dairy on the ground floor producing net annual rental income of $80,544 with an 80sq m fully rebuilt vacant flat above.
● A 477sq m single-level retail building at 179-181 Great South Rd, Papakura with two tenants in occupation for over 25 years sold for $1,310,000 at a 5.9 per cent yield through Peter Migounoff and Piyush Kumar, Bayleys South Auckland. Anchored by Whitcoulls, with a smaller hair salon tenancy, it is located on a 460sq m CBD site zoned Metropolitan Centre under the Proposed Auckland Unitary Plan (height limit 21 metres) with 10 car parks at the rear. The property was declared on the market at $1,100,000 and a further 30 bids followed adding a further $210,000 to the sale price.