Napier and Taupo sales show interest in central North Island
Two prime industrial properties in Napier and Taupo¯ have been snapped up for almost $10 million, highlighting the enormous demand for commercial property in the central North Island.
The properties at 96 Austin Street, Napier, and 2 Titan Way, Taupo¯, were purchased by an out of town investor who has been expanding the regional reach of their investments.
Both sales were transacted in recent weeks by Colliers International’s brokerage teams in Hawke’s Bay and Taupo¯.
Hawke’s Bay broker Calum Ironside, who was involved in both deals, said there continues to be plenty of investor demand from outside the region.
“We received strong enquiry on both properties from Auckland and other centres, as investors look to the regions for competitive yields and long-term returns.
“Both properties had strong appeal but presented quite different propositions. The Taupo¯ property is a prime passive investment with good cashflow, while the Napier property is an excellent long-term hold or redevelopment opportunity.”
The Taupo¯ property sold for $3.75m at a yield of 6.53 per cent. The deal was brokered by Ironside with Hugh Milloy and Jack Hughes of Colliers International Taupo¯.
Milloy said the 10,237 square metre freehold property is well located in the popular industrial precinct of Rotokawa. Situated only three minutes from State Highway 1, the property comprises a 1895 square metre industrial facility with a high stud warehouse, drive around access and a security fenced yard.
“The purchaser was particularly attracted to the strength of the tenant covenant. The property is on a new six-year lease to Activated Carbon NZ, which is New Zealand’s leading producer of activated carbon from sawdust organic waste,” said Milloy.
“The lease provides locked-in rental growth and market reviews on renewal, providing upside through to final lease expiry in 2044.”
The Napier property sold for $6.2m at a yield of 3.68 per cent. The deal was also brokered by Ironside with Rob Nankervis of Colliers International Hawke’s Bay.
Nankervis said the 2.96ha freehold site is situated in the heart of Napier’s tightly held Onekawa industrial precinct. Its location only 4km from Napier’s CBD provides excellent connectivity to the Port of Napier and the Hawke’s Bay Expressway.
“It offers significant development opportunities by either leveraging off the vendor’s draft subdivision plans or starting from a blank canvas to suit requirements,” said Nankervis.
“The purchaser will also be able to draw on short-term passing income from a yard-based tenant, providing cashflow while making plans to unlock the site’s future potential.”
Nankervis said the Hawke’s Bay property market continues to go from strength to strength as sales and leasing activity have been strong since the Covid-19 lockdown was lifted earlier this year, with particularly buoyant demand for industrial property.
“We expect this trend to continue into the new year, as investors from a wide geographic spread continue to seek prime regional commercial property assets.”