Bayleys’ last auction for year ends on a high note
ontinuing strong demand for a wide range of commercial and industrial properties was a feature of Bayleys’ final Total Property auction portfolio for the year in Auckland.
A total of 19 properties sold before, at or shortly after auction at a total value of $ 37.9 million.
Bayleys’ national director commercial John Church says auctions have worked particularly well for vendors this year with plenty of competition among bidders resulting in high clearance rates and firming prices.
“Our regular Total Property portfolio auctions continue to attract big crowds with the bidding process providing a very transparent method of sale for both purchasers and vendors. They also provide a very good insight into the state of the market.
“This year’s auctions have reflected just how much market demand continues to outstrip supply, with big bidding competition on many properties pushing yields to even lower levels and land and building prices to new highs in superior locations,” says Church.
“However, with the market now nearing its peak investors are focusing particularly on properties in strong, growth locations which are likely to perform the best across various market cycles.
“For that reason, some properties which are in what are perceived to be weaker locations, or have other issues, are finding it harder to attract bidders.”
Three well located Auckland properties with favourable zonings sold for $ 300,000 more than the price they were declared on the market at by auctioneer Richard Valintine, while a motel property in sought after Marine Parade, Napier, sold for $ 500,000 more than its “on the market” price.
Valintine said the auction started with very strong bidding on two industrial properties in Onehunga and Morningside, both with mixed use zonings which opened up the possibility of a range of future development opportunities in t wo increasingly popular suburbs.
The Morningside property encompassed a 809sq m north facing site with a large yard area at 4 Taylors Road, with a 649sq m office and a high- stud warehouse building. It sold with vacant possession for $ 2,900,000 through Scott Kirk and James Were, Bayleys Auckland.
Bidding started at $ 1.8 million and it was declared on the market, meaning it had met its reserve price, at $ 2.6 million.
The Onehunga property at 106 Beachfront Avenue comprised a 431sq m standalone warehouse and office building on a 692sq m site, with holding income from month to month tenancies, marketed by James Valintine, Bayleys Auckland, and Graeme Moore, Bayleys South Auckland.
Bidding started at $ 700,000 and quickly advanced to $ 1.2 million, at which point it was declared on the market. A further 18 bids added an additional $ 305,000 to the sale price before the hammer finally came down at $ 1,505,000.
The only business- zoned property on Torbay/ Waiake beachfront also attracted big bidding, before selling with vacant possession for $ 1,800,000 through Damian Stephen, Adam Curtis, and John Algie, Bayleys North Shore Commercial and Tony Chaudhary, Bayleys South Auckland.
Up for sale was a 140sq m commercial building which previously accommodated longstanding restaurants located on a third share of a 1072sq m site. Bidding started at $ 700,000 and it was declared on the market at $ 1.5 million.
The Napier property located on a 1413sq m site opposite the waterfront at 359 Marine Parade accommodates the 1265sq mEdgewater Motor Lodge, with 20 self- contained motel units plus manager’s accommodation, on a lease until 2040. It was marketed by Paul Dixon, head of Bayleys’ tourism and business sales division and Sam MacDonald, Bayleys Hawke’s Bay and sold for $ 3,750,000 at a 6.02 per cent yield. It attracted close to 50 bids and was declared on the market at $ 3,250,000.
Two properties in the Total Property portfolio also sold under the hammer for over $ 5 million. A fourlevel building with nine two and one bedroom apartments on a 701sq m site at 3 Birdwood Crescent, Parnell, sold for $ 6,750,000 through Gary Wallace, Bayleys Newmarket.
A more intensive Terraced Housing and Apartment Building zoning under the new unitary plan means the property has further development potential.
A 470sq m retail building at 153 Ocean View Rd, Waiheke Island — on an 1087sq m site in Oneroa’s main commercial strip — sold for $ 5,650,000 at a 4.08 per cent yield through Simon Smith, Bayleys Ponsonby and Cathy Cameron, Bayleys Waiheke
It is fully leased to six longstanding tenancies including the island’s longest running restaurant Vino Vino and the Waiheke Wine Centre.
The property has panoramic views over Oneroa beach and future development land on the northern part of the site. It attracted seven bidders with bidding starting at $ 3 million before quickly moving beyond $ 5 million.
Other retail offerings also sold at low yields. A 60sq m unit in Lincoln North Shopping Centre, Henderson sold for $ 465,000 at a 4.85 per cent yield through Matt Lee and Quinn Ngo of Bayleys International Division in conjunction with Tony Chaudhary, Bayleys South Auckland.
The property has a five year lease from February 2016 to multinational eyewear retailer Luxottica ( OPSM).
Chaudhary and Bayleys South Auckland colleagues Janak Darji and Amy Weng sold a 417sq m standalone retail building at 255 Onehunga Mall, occupied by Cotton On Clothing, for $ 2,210,000 at a 4.98 per cent yield.
It is located on a 379sq msite with a Town Centre– Onehunga zoning ( 24.5m height limit)
The global retailer has taken an eight year lease from August 2016, with 3 per cent annual rental increases and one eight- year right of renewal, as part of a major expansion in New Zealand.
Built in the 1950s, the premises underwent a major refurbishment prior to the lease to Cotton On which has also undertaken its own extensive internal fitout.
A 198sq m single- level character retail building on a 526sq m site also with a Town Centre zoning at 1191 Great North Rd, Pt Chevalier, sold for $ 1,550,000 at a 5.42 per cent yield through Owen Ding, Quinn Ngo and James Chan of Bayleys International Division.
The property is located adjacent to Point Chevalier retail arcade and Countdown supermarket car park, with separate short term leases to optometrist and osteopath practices.
Lee, Chan and Ngo, in conjunction with Jan Hutcheson, Bayleys Warkworth, were also involved in sale of a further three units in the recently completed The Grange retail convenience centre on SH1 at 67 Auckland Rd, Warkworth.
A 128sq m restaurant sold for $ 1,005,000 at a 6.47 per cent yield with an eight- year lease and two fouryear rights of renewal to Mongolianstyle eatery Cizzlin.
A 59sq m fish and chip premises with a 10- year lease and one five- year right of renewal sold for $ 565,000 at a 5.48 per cent yield and a 77sq m bakery with a five- year lease and one eight- year right of renewal sold for $ 560,000 at a 5.36 per cent yield. All three leases have fixed annual rental increases based on the Consumer Price Index, plus 1 per cent.
The highest yielding property to sell at the auction was a 120sq m retail unit within the Empire Hostel building at 23 Whitaker Place, Grafton, which sold for $ 150,000 at a 15.65 per cent yield through Beterly Pan and Nicolas Ching of Bayleys International Division.
Previously operated as a restaurant, it has a three- year lease from August 2014 to Crepes A Go- Go.
Other properties to sell under the hammer included: A vacant 5104sq m industrial land holding at 9- 11 Nandina Avenue, East Tamaki sold for $ 2,860,000, at $ 560 per sq m through John Bolton and Katie Wu, Bayleys South Auckland. The metalled and flat site is in two equal titles and has 74m of road frontage. A 220sq m two- level commercial building on a 276sq m site, at 349 Great North Rd, Henderson, with parking at the rear, sold for $ 1,045,000 at a 4.78 per cent yield through Mike Adams and Laurie Burt, Bayleys West Auckland. Established tenant Maxwell Dry Cleaners has renewed its lease for 10 years, from July 2016. An 800sq m mixed used commercial and residential building with four carparks on a 516sq m site, at 17 Monk St, Whitianga Town Centre, sold for $ 1,030,000 through Noel Rogers, Bayleys Whitianga. Four separate shops currently provide income of $ 53,000pa net with t wo apartments and separate studio/ workshop above.
John Church says given the success of Bayleys’ national Total Property portfolio campaigns this year — which have produced some outstanding results for vendors — the agency will be moving to eight Total Property campaigns next year, beginning with the release of the first portfolio on February 3. Listings for the first portfolio close on January 20.