Attractive return at Addington offices
"Yields like this are simply never seen on quality, fully-tenanted investment properties in the current market." Savills agent Jonathan Lyttle
A commercial property in Addington is being sold on the attraction of a 9.5 per cent return.
Savills agent Jonathan Lyttle said the property, which is located at 45 Princess St in Addington’s Workstation 55 business park, had one of the highest yields seen on high-quality commercial property in Christchurch in recent years.
The asking price of $5.43 million represents a 9.5 per cent yield on the $515,910 annual rent from three tenants.
It is leased to television production firm Whitebait Media, recruitment company Hudson Global and Green Room Cafe.
‘‘Yields like this are simply never seen on quality, fullytenanted investment properties in the current market,’’ Lyttle said. ‘‘It’s a really compelling option for investors seeking higher returns than commonly available.’’
During the recent buoyant years for the commercial property sector, real estate agents have highlighted firm (low) yields of between 5 per cent and 8 per cent achieved on the sale of investment properties.
The firm yields reflected the higher prices buyers were prepared to pay as well as the longerterm outlook of buyers about an area or about the economy.
For example, three Canterbury New Zealand Post outlets (one each in Ashburton and Bishopdale, and one on Ferry Rd) have recently sold at yields of between 6 per cent and 7 per cent.
Lyttle said the vendor in this case acknowledged prevailing sentiment about suburban commercial property and pitched the price at what he considered an appropriate level.
However, the major tenant, Whitebait Media, had itself invested about $1.5m on a significant upgrade and fitout when it moved to the property in 2009.
This resulted in a highly specialised, bespoke studio, which Whitebait uses to produce several well-known shows including What Now, which is New Zealand’s longest-running children’s television programme.
Whitebait is the largest film production company in the South Island. Its 1994-square-metre tenancy includes a reception area, a main film studio, offices and secondary studio space.
Global recruitment company Hudson, which operates in 20 countries, has had first-floor offices at the property since 2011.
Green Room Cafe is the only cafe serving the business park. It opened in 2010 and the operators have just renewed their lease.
The property consists of two adjoining buildings that have been seismically strengthened to 67 per cent of the building code.
Workstation 55 benefited from the earthquakes when many firms relocated to city-fringe areas.
Some have since moved back to the central city and suburban office and industrial rents have been reducing, according to research by agency JLL.
‘‘With office investments in Addington providing significant cost benefits compared with the CBD, this property represents excellent value for purchasers,’’ Lyttle said.
Offers for 45 Princess St close on Wednesday, September 27.