The largest sale of the day of $4,575,000 was achieved for Burger King's head office at 6 Antares Place, Rosedale.
Thirteen of 18 properties offered at Bayleys' latest Greater Auckland commercial and industrial portfolio auctions sold under the hammer for close to $23 million.
Richard Valintine Bayleys' commercial auctioneer said the auction drew one of the biggest attendances seen in Bayleys' central Auckland auction rooms in recent times with the crowd spilling out the doors for the early offerings.
"There was very strong, rapid fire bidding across most offerings," Valintine says. "There's no doubt that the Reserve Bank's recent cut in the Official Cash Rate - with the prospect of more to come - has added fuel to the commercial property market and is putting even more downward pressure on yields."
Valintine said this was evident in the first property offered. The 266 sq m under-utilised corner site with a 190 sq m industrial building and zoned Mixed Use at 29 Nixon St in Grey Lynn, sold for $920,000 at a 3.3 per cent yield through Simon Aldridge and Michael Nees of Bayleys North Shore Commercial and Tony Chaudhary of Bayleys South Auckland. The property is tenanted by RSB Electrical with a final lease expiry in mid-2018 at which stage the site could be more intensively developed.
"There was huge interest in this property reflecting strong market demand for well-located properties that provide an add value opportunity," Valintine said. "This is particularly so if they have a flexible Mixed Use zoning, as was the case here, due to this presenting a wide variety of future commercial and residential development options."
One of the most fiercely contested offerings of the day was an 824 sq m industrial premises with a smaller upstairs office tenancy on a 1144 sq m site at 39 Porana Rd, Wairau Valley. Occupied by Windows Treatments NZ it sold for $2,010,000 at a 5.4 per cent yield following bidding which started at $1.3 million. The property was declared to be "on the market" by Valintine at $1,765,000 with 40 more bids following including a number of $1000 increases from multiple parties in the auction room plus a telephone bidder. This added an extra $245,000 to the eventual sale price.
Ranjan Unka, investment sales manager for Bayleys North Shore Commercial, who sold the property with colleague Chris White, said it sold at a very low yield for an industrial offering but this reflected negligible vacant industrial space in the Wairau Valley which meant very little tenant risk for investors.
"Industrial property is the strongest performing sector of the North Shore investment market at present mainly because a big pick up in occupant demand is swamping a limited supply of empty premises and this has pushed vacancy rates to very low levels. As a result, the formerly sizeable yield gap between industrial and retail investment property has narrowed to the point where they are now at very similar levels."
Further south in the North Waikato township of Tuakau, 347 sq m retail premises on an 835 sq m site, with three tenants including NZ Post, sold for $805,000 at a 5.1 per cent yield through Shane Snijder, Graeme Moore and Tony Chaudhary of Bayleys South Auckland.
Bidding on this property started at $400,000 and quickly advanced to $690,000 when it was declared on the market, with 20 further bids following before the hammer eventually came down.
Snijder says satellite towns such as Tuakau and Pokeno, strategically positioned close to the motorway between Auckland and Hamilton, are attracting plenty of investor interest at present because of anticipated future population and business growth.
Two properties close to the LynnMall Shopping Centre in heart of New Lynn also attracted strong competition. A narrow 956 sq m car yard site at 3026 Great North Rd, with dual access to Veronica St, attracted 60 bids before selling for well over the reserve price at $1,155,000 for a 4.2 per cent yield through Kate Kirby and Laurie Bell, Bayleys Auckland. The tenant last year exercised first of two three-year rights of renewal, with a rent review due in September next year. Bell said the property was purchased by a car yard owner from another part of Auckland.
Nearby at 3029A Great North Road, New Lynn, a 325 sq m bank premises which BNZ has occupied since 2002 sold for $2,326,000 at 6.1 per cent yield through Tony Chaudhary and Janak Darji of Bayleys South Auckland. Following an extensive internal refurbishment, the bank took a new eight-year lease from 2011, with rights of renewal. Two phone bidders and multiple bidders in the auction room competed for the property.
The largest sale of the day of $4,575,000 was achieved for Burger King's head office at 6 Antares Place, Rosedale on the North Shore. The recently refurbished 1266 sq m commercial and warehouse building on a 2482 sq m site with 51 car parks, was sold at a 6.4 per cent yield by Marty Roestenburg of Bayleys South Auckland. It has a new eight year anchor lease to Antares Restaurant Group, which operates the Burger King chain in New Zealand, plus a smaller new four year lease to engineering consultancy Engeo.
Also fetching a substantial price was a 2020 sq m light industrial and retail complex with five tenancies at 62 Ben Lomond Crescent, Pakuranga, located on a 4049 sq m high profile corner site with Cascades Rd. It sold for $3.5 million at a 6.2 per cent yield through Shane Snijder, Tony Chaudhary & Geoff Wyatt of Bayleys South Auckland.
Three rural supplies stores, marketed by Mike Adams, Bayleys Auckland and Josh Smith, Bayleys Hamilton in conjunction with Jeremy Keating, CBRE, also sold under the hammer with new eight year lease backs to Fonterra wholly owned subsidiary RD1 which is being rebranded as Farm Source.
An 858 sq m Farm Source store on a 2613 sq m site at 9 Commercial Rd, Helensville, sold for $1,710,000 at a 6.9 per cent yield; while another at Kopu, six kilometres from Thames, sold for $1,925,000 at a 7.05per cent yield; and a Taupiri store sold for $1,650,000 at an 8.2 per cent yield.
Other properties to sell under the hammer at the Greater Auckland auction included:
• The mortgagee sale for $1.2 million at an 8.5 per cent yield of a 2392 sq m industrial building on a 2592 sq m site with development potential through Nick Bayley and Dave Stanley of Bayleys South Auckland.
• TTwo adjoining shops totalling 550 sq m at 81 O'Shannessey St, Papakura, located on one 596 sq m title, adjacent to Farmers' car park and department store, sold with vacant possession for $680,000 through Peter Migounoff and Piyush Kumar of Bayleys South Auckland
• TA 9990 sq m block of undeveloped land with substantial frontage onto Dairy Flat Highway, Dairy Flat, sold with vacant possession for $200,000 through Rosemary Wakeman and Ashton Geissler of Bayleys North Shore Commercial. Currently zoned General Rural but with Future Urban zoning under the Proposed Auckland Unitary Plan, it has significant encumbrances on the title.
Two developers went "hammer and tongs" at mortgagee auction.