Student digs sought after by investors
A former Christchurch Bupa rest home that has been transformed into recently opened student accommodation was bought at auction for $6.025 million.
The University of Canterbury has a 12-year lease on the property, with a further right of renewal of nine years. The lease included annual rental of $320,000 a year, making for a sharp 5.31 per cent yield on the sale.
The property at 7-15 Kirkwood Ave was previously owned by Hamilton-based investors and attracted 41 bids.
Marketing agent Courtney Doig, of Colliers International in Christchurch, said the property was popular because of the significant amount of land plus the strong tenant.
The land holding of 5900 square metres is in three titles, and the building covers 2630sqm.
There was potential for future redevelopment, she said.
Called Kirkwood Avenue Hall, the building was refurbished and opened this year to accommodate 74 full-time students as a selfcatered hall for first-year students.
It was previously the St Nicholas aged-care facility operated by Bupa NZ.
Doig said the new hall had helped to address the scarcity of quality student accommodation close to the university.
The area, which is in the heart of residential Ilam, is sought after by students as well as people seeking student accommodation investments.
Kirkwood Avenue Hall was one of the largest conversions of such scale, Doig said.
Recent sales in the area included six ownership units at 12 Kirkwood Ave, which sold in 2015 for $1.4m and were also leased by the University of Canterbury.
Other commercial properties sold at the latest Colliers auction included a building in Riccarton Rd, which fetched $3m, and a small industrial site in Waltham, which sold for $460,000.
Doig said more than $100m of capital ‘‘walked out of the auction room without being able to find a home’’. That demonstrated that the market was alive and well for people with equity looking for high-calibre, well-leased properties, she said.
Another sale at the auction was a central city complex of 16 twoand three-bedroom residential units in Salisbury St. The complex was built after the earthquake in 2014 and sold for $3.8m by the estate of the late owner.
Salisbury St has been undergoing a transformation in recent years as more people choose to live closer to the central city. The properties include earthquake-damaged apartment blocks that have been sold as-iswhere-is over the past couple of years.
For example, two developments that changed hands in 2015 have been repaired. Refurbishments were recently completed on a 34-unit complex at 226 Salisbury St, now fully occupied.
Along the road at 136 Salisbury St, a 32-unit complex has been revamped, with units now available for sale or lease.