No 3 Paragon Place, which sold for $780,000, is occupied by NZ Car Canterbury
Seven out of eight standalone properties put up for sale in a light industrial complex at Sockburn have sold under the hammer at a total value of $6,355,000 at a Bayleys Total Property auction in Christchurch.
Located on the corner of Paragon Pl and Waterloo Rd, the portfolio contained a range of fully leased offerings on separate titles on a total land holding of 9360sq m in the heart of Christchurch's western industrial belt.
Marketed by Campbell Taylor, senior agency director and Craig Edwards, investment sales director, for Bayleys Canterbury on behalf of long-standing private family owners, the properties achieved prices of $550,000 to $1,240,000. Most sold at yields of 6.4 to 6.6 per cent.
"The vendor was prepared to consider unconditional offers for the portfolio as a whole prior to auction but decided that the best result would be achieved by auctioning the properties individually," says Campbell Taylor
"Six of the properties that sold offered a high standard of light industrial accommodation on Paragon Place mostly developed in the mid 1990s and mid 2000s which underwent seismic strengthening and some further refurbishment following the Christchurch earthquakes.
"The other sale was of a prime corner site in three titles on Waterloo Rd which presents a substantial development or value add opportunity for the new owner."
Taylor says while most of the properties have current leases expiring by 2020, they have renewal options and are located in a highly successful development with a well-established reputation for historically low vacancy levels.
Edwards adds that the auction generated strong interest in a Christchurch commercial property market that has been constrained by a limited supply of quality investment offerings this year.
"There was a pleasing response from investors with a good spread of bidding across the properties. Two were purchased by the same buyer with the others each bought by different parties. There was also a big turn out from the valuation fraternity which has been struggling to get much of a fix on the market this year because of the low volume of comparative sales activity."
The properties to sell were:
• 3 Paragon Place: a 412sq m warehouse, office building developed in the mid 2000s on a 787sq m site with street frontage of more than 50m sold for $780,000 at a 6.66 per cent yield. It is occupied by NZ Car Canterbury as its compliance facility, on a lease expiring in June 2019, with one four-year right of renewal.
• 4 Paragon Place: a 1621sq m site on the corner with Waterloo Rd, in two titles, occupied by vehicle dealer NZ Car Canterbury, sold for $1,240,000 at a 7.04 per cent yield. There is also 526sq m of high-stud showroom space and ancillary offices, amenities, workshop and mezzanine storage. This lease also expires June 2019 with one four-year right of renewal.
• 6 Paragon Place: a 521sq m warehouse and office building on an 803sq m site which sold for $925,000 at a 6.43 per cent yield. It is eased to HVAC (heating vacuum and air conditioning) supplier and servicer AMT Mechanical Services until March 2020, with one three-year right of renewal.
• 7 Paragon Place: a 413sq m stand-alone warehouse building with a substantial food grade fitout installed by the tenant on a 784sq m site sold for $760,000 at a 6.38 per cent yield. Leased to a manufacturer and exporter of nutritional powdered dairy products until January 2023, with one five-year right of renewal.
• 8 Paragon Place: a 267sq m single-level warehouse, showroom and office building on a 500sq m site sold for $550,000 at a 6.54 per cent yield. Leased to global property services company Cushman & Wakefield until June 2020 with one three-year right of renewal.
• 12 Paragon Place: a 637sq m warehouse and office building on a 1086sq m site which sold for $970,000 at a 6.41 per cent yield. Engineering fabricator Action Automatic Manufacturing has been in occupation for over 20 years with a lease until November 2019 plus one three-year right of renewal.
• 26-32 Waterloo Road: a 2864sq m land holding in three titles, used for vehicle display, that sold for $1,110,000, or $388 per sq m, at a 4.55 per cent yield. A lease to NZ Car Canterbury, which also occupies surrounding properties (3 and 4 Paragon Place), expires at the end of June next year with no further rights of renewal.
The only property to pass in was a 547sq m warehouse and office building on a 915sq m site at 10 Paragon Pl where Topcoat Specialist Coatings (South Island) Ltd has taken an assignment of a five-year lease until 2020, with a further five-year right of renewal. Edwards says negotiations are continuing with a number of interested parties on the property.