Mt Eden sale breaks records
Low interest rates mean great deal for vendor, writes Catherine Harris.
Auckland commercial property is in such demand that a buyer has paid top-dollar for a twolevel Mt Eden property, resulting in a super-low 2.96 per cent yield.
The 134 square metre property cat 409 Mt Eden Rd, currently home to a cafe and restaurant, sold at auction for $1.52 million.
The lower the yield, the better the deal for the vendor, based on the price paid versus net income.
Tony Allsop and Jonathan Lynch, the agents who sold the property for Colliers International, said the sub-3 per cent yield broke Colliers’ records for an investment property.
‘‘Mt Eden village is a very highly sought-after investment location, both residentially and commercially, and the 20-plus registered bidders at the auction reflected that,’’ Allsop said.
Colliers International’s Auckland managing director, Charles Cooper, said it was another sign of the growing strength of the commercial property market.
‘‘We’re currently in a market unlike any other in recent memory – largely driven by record low interest rates, and results like this underpin investors’ confidence.’’
Meanwhile, work on a second multimillion-dollar hotel at Queenstown’s Remarkables Park is expected to begin early next year.
The 98-bed hotel will have nine retail units and be built for Wyndham Hotel Group.
It is Queenstown’s second new hotel in five years and will be sited south of the new Ramada Hotel, which opens in Remarkables Park in June.
Both hotels are being developed by Safari Group, which also plans to build 55 apartments immediately next to the new Wyndham hotel. The total cost of the project is expected to be $58m.
A NZTE report estimates New Zealand needs 26 more hotels, above and beyond those currently planned, to meet tourism demands over the next 10 years..
Smaller listed property fund NPT has seen its net profit lift over 31 per cent this year as it continues to ‘‘unlock value within its property portfolio through selective development works’’.
The company, which owns Eastgate Mall in Christchurch, reported a net profit of $8.4m for the year to March 31, and a distributable profit of $6.1m, up 1 per cent.
Net rental income rose 0.4 per cent to $11.5m and the company maintained a cash dividend of 3.5 cents per share.
Its property portfolio rose in value by 2 per cent or $3.1m.
The company said development work at Eastgate was on track and on budget, and it was moving to reposition its 18-storey AA Centre in the Auckland office market.
Looking ahead, NPT forecast a full year cash dividend of 3.6 cps for the 2017 year.
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