Archive | Coastal

Updated again: Bayleys auction sales rise to 17

Published 29 October 2015, updated 4 November 2015 and again on 30 November 2015:
Bayleys made it over a 50% clearance rate on Thursday from its commercial auction the day before, and has added 2 more sales this week.

The agency sold 10 properties under the hammer from an auction list of 26, 2 sold prior and has sold 4 post-auction. One property was withdrawn.

By the end of November, sales were up to 17, with another unit in the Harbourside Business Park on Rosebank Rd sold.

The first 2 post-auction sales were an Avondale building and the Edinburgh Castle Hotel (pictured above), and the latest pair are a Whangarei office building and a second Avondale building.

Isthmus east

Grafton

36 Burleigh St:
Features: Modern 280m² tilt-slab warehouse/showroom on a 563m² underutilised mixed-use site with exposure to Mt Eden Rd; tenant Brake & Transmission NZ Ltd has exercised the first of 2 3-year rights of renewal
Rent: $69,500/year net + gst
Outcome: sold for $1.795 million at a 3.9% yield
Agents: James Hill & Sunil Bhana

Meadowbank

135 Meadowbank Rd:
Features: 129m2 site, new 158m2 2-level building, 4 tenants in serviced offices on upper level, hair salon on monthly tenancy on ground floor, 2 parking spaces
Outcome: sold for $750,000 to owner-occupier intending to move into the ground-floor space
Agents: Ed Donald & Sarah Boles

Remuera

30 Remuera Rd:
Features: 74m², retail unit at entrance to the Newmarket train station
Rent: $56,000/year net + gst
Outcome: withdrawn from auction
Agents: Owen Ding & James Chan

Isthmus west

Avondale

527B Rosebank Rd, units 3 & 4:
Features: 444m² building on 444m² site in the Rosebank Business Park, zoned 7A commercial office, 16 parking spaces; tenant on newly renewed lease of 6 years from 1 September
Rent: $110,450/year + gst + opex
Outcome: passed in at $1.55 million
Agents: Laurie Bell & Grant Miller

483 Rosebank Rd, unit A.

483 Rosebank Rd, unit A.

Updated: 483 Rosebank Rd, unit A:
Features: modern 474m2 2-level showroom office building in Harbourside Business Park, 20 parking spaces
Outcome: passed in at $900,000, sold vacant post-auction for $1 million
Agents: James Appleby & Mike Adams

Updated: 483 Rosebank Rd, unit B:
Features: 734m² – 367m² warehouse, 367m² office & amenities, 16 parking spaces
Rent: vacant
Outcome: passed in at $1 million, sold post-auction for $1.4 million
Agents: James Appleby & Mike Adams

Updated: 483 Rosebank Rd, unit C:
Features: 800m² unit – 400m² warehouse 400m² office, 18 parking spaces; upstairs office provides holding income from short-term lease
Outcome: passed in at $1.1 million, sold post-auction for $1.4 million
Agents: James Appleby & Mike Adams

Eden Terrace

215 Symonds St:
Features: 150-year-old Edinburgh Castle Hotel on 571m² mixed use-zoned site on corner of Newton Rd; New Skyworld Bar & Hotel Ltd, which exercised the first of 4 3-year rights of renewal in July, operates a sports bar on the ground floor, residential accommodation above
Rent: $145,000/year net + gst
Outcome: passed in at $2.25 million, sold post-auction for $2.49 million at a yield of 5.8%
Agents: Cameron Melhuish & Andrew Wallace

Mt Eden

131 Mt Eden Rd.

131 Mt Eden Rd.

131 Mt Eden Rd:
Features: 507m² character building on high profile 341m² corner site, lease on 116m2, but 253mground floor & 138m2 level 1 areas vacant
Rent: $35,000/year net + gst
Outcome: sold for $1.34 million
Agents: Phil Haydock & Jean-Paul Smith

Mt Roskill

164 Stoddard Rd:
Features: 715m² 2-level building on 933m² site, multiple retail tenants
Rent: $133,000/year net + gst
Outcome: sold prior for undisclosed price
Agents: Tony Chaudhary & Janak Darji

North

Oakura

45 Ohawini Rd:
Features: 59.8ha freehold waterfront site, the Whangaruru Beachfront Camp up east coast from Whangarei
Outcome: no bid
Agents: Ross Blomfield

Warkworth

Moir Hill & Matthew Rd:
Features: 320ha ex-forestry block in 4 titles, including 43.6ha of native bush, several kilometres of metal roads, 9km from Warkworth
Outcome: sold for $811,000
Agents: Duncan Napier & Dianna Coman

Whangarei

111-113 Bank St:
Features: 2072m² corner site, 2-level 1782m² office building, seismic rating 80% new building standard, 34 parking spaces, multi-tenanted & fully leased
Rent: $324,944/year net + gst + opex
Outcome: passed in at $3.925 million, sold post-auction for $4.21 million at a 7.7% yield
Agents: Ross Blomfield

North-east

Rosedale

7D Douglas Alexander Parade:
Features: 407m2 high stud warehouse, office & showroom, 8 parking spaces
Outcome: sold vacant for $920,000
Agents: Laurie Burt & Ashton Geissler

331 Rosedale Rd, unit 8B:
Features: 159m² floor area, tenant Moustache Republic Ltd on 2-year lease with 2 2-year rights of renewal
Rent: $43,966/year net + gst + opex
Outcome: sold for $635,000
Agents: Alex Strever & Dean Gilbert-Smith

3 Tarndale Grove:
Features: 1258m² site, 2 warehouse units with total 890m² floor area
Outcome: no bid except for vendor bid at $1.5 million
Agents: Matt Mimmack & Ranjan Unka

Wairau Valley

18 Link Drive, unit P(16):
Features: 668m² floor area, 13 parking spaces
Rent: $113,051/year net + gst + opex
Outcome: passed in at $1.15 million
Agents: Trevor Duffin & Tonia Robertson

41-53 View Rd, unit K:
Features: 597m2 industrial building, mix of warehousing with multiple roller doors and office/showroom
Outcome: sold vacant for $960,000
Agents: Mike Adams & Trevor Duffin

North-west

Helensville

84 Commercial Rd:
Features: 293m² mainstreet site, vacant 211m² ex-Video Ezy shop
Outcome: no bid except for vendor bid at $250,000
Agents: Grant Miller & Laurie Bell

Kumeu

7 Shamrock Drive:
Features: vacant 876m² warehouse & office, 10 parking spaces
Outcome: passed in at $1.254 million
Agents: Rosemary Wakeman & Ashton Geissler

New Lynn

18 Clark St, unit G:
Features: 204m2 retail outlet with cafe tenant
Rent: $28,000/year net + gst
Outcome: sold for $605,000 at a 4.6% yield
Agents: Grant Miller & Laurie Bell

South

Airport Oaks

24 Rennie Drive, Mangere.

24 Rennie Drive, Mangere.

24 Rennie Drive:
Features: 750m2 standalone warehouse plus 160m2 first-floor office, A+ seismic rating assessment; 6-year lease to government tenant from 2014 with 2 3-year rights of renewal
Rent: $101,000/year net + gst
Outcome: sold for $1.9 million at a 5.3% yield
Agents: Marty Roestenburg

Papakura

80-82 Great South Rd:
Features: 320m2 Wendy’s restaurant on 20-year lease to Wendco (NZ) Ltd from 2000 & no right of renewal; large site in 2 titles of 1037m² & 1080m2 with metropolitan centre zoning under proposed unitary plan
Rent: $160,578/year net + gst
Outcome: sold for $2.803 million at a 5.7% yield
Agents: Eddie Zhong & Damian Stephen

55 Hunua Rd:
Features: vacant 4057m² site, trucking facility with modern workshop & mechanics’ pit, air-conditioned offices, 492m² of building
Outcome: passed in at $1.15 million
Agents: Shane Snijder & Peter Migounoff

Tuakau

143 Bollard Rd:
Features: 2094m2 site with main road frontage & light Industrial zoning plus holding income from 3-bedroon 90m2 house
Rental appraisal: $380/week net + gst
Outcome: sold prior for $517,500 including gst
Agents: Graeme Moore

Attribution: Auction.

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Dickens research finds Northland coastal market in sorry state

Published 25 November 2009

While there was a boom in residential section sales nationally from 2002-07, researcher Rodney Dickens described sales in Northland as a “mega-boom”. His latest research there shows prices in all 5 settlements studied have returned to pre-boom levels.

 

The Northland boom released far more sections on to the market than could reasonably be developed in the medium term, causing long-term market problems: “All would have been fine if the sections sold in these hotspots were largely to end-users, although of the 5 areas (studied) this was more the case in Kerikeri.

 

“However, lured by the promise of quick capital gains, many buyers were spec buyers/investors and the problem now facing developers is that to a greater or lesser extent they are competing with the spec buyers/investors for the low level of demand. The problem is being helped to some extent at the moment as low interest rates & higher population growth fuel demand for new housing & sections, but this is more an urban story than a coastal story.”

 

Mr Dickens is now managing director of Strategic Risk Analysis Ltd, and its chief researcher. Before founding the company in 2006, he was ASB Bank’s group strategist & head of research for 5 years. He’s been a member of the Reserve Bank’s monetary policy committee, researched international interest rate behaviour at the Bank of England, was a bank chief economist at one New Zealand commercial bank and New Zealand head of research at 2 international investment banks.

 

In his latest Property Insights, Mr Dickens said: “The demand-supply balances vary significantly from market to market, but in general the Northland coastal section market is not close to ‘clearing’ yet – in other words, asking prices are still in general too high relative to what buyers are willing to pay.

 

“The section market is of major importance to the existing-house market because an existing house is just a depreciating asset sitting on a piece of dirt, so what happens to section prices has a major bearing on existing-house price prospects.”

 

Mr Dickens has previously examined all of Northland’s coastal settlements’ property markets. This update includes the relatively new One Tree Point-Marsden Point-Ruakaka market but excludes Paihia & Russell.

 

Mr Dickens said the Mangonui area was one part of the coastline where investors played a major part in funding new subdivisions, and there’s little sign of sales recovering there yet. Before the boom years, section prices in the Mangonui area were generally 30-40% below the national median section price, but at the peak of the boom they sold at a premium. He said “a semblance of normality” had returned, with median section prices in Mangonui at a 24% discount to the national median in the last year.

 

“However, this doesn’t mean equilibrium has returned to this market in terms of demand & supply being in reasonable balance, because there are still lots more would-be vendors than there are eager buyers. In the year to October 2009, the Real Estate Institute reported 59 sections being sold in the greater Mangonui area, while we found 498 ads for sections for sale in this area on www.realestate.co.nz, which doesn’t include either the significant number of sections people are trying to sell privately on Trade Me or the unknown number of sections developers are trying to sell direct to the public.”

 

Even allowing for an element of double counting, Mr Dickens said “the net result would still be a demand-supply balance heavily over-weight on the supply side.”

 

In Strategic Risk Analysis’ in-depth research of the Marsden Point-Ruakaka area, which included detailed analysis of 12 subdivisions, “we found over 300 sections for sale. The bulk of sections had asking prices in the $150-300,000 range, with many of these sections having neither direct beach access nor sea views. However, there were also a significant number with asking prices in the $600-900,000 range, largely reflecting the Marsden Cove marina development. Section sizes are pretty standard with the bulk in the 600-800m² range.”

 

Before the start of the boom in 2003, the median section price in Marsden Point-Ruakaka was just under $90,000, based on the comprehensive QV data, which was close to the median sales price in Whangarei District and a bit below the national median prices. Between 2003-05, the local median section price surged relative to the district & national medians. “This appears to in part reflect a larger increase in local section prices but possibly more important was the advent of Marsden Cove in 2005, which offered superior sections at much higher prices. Equally, the larger fall in the local median section price relative to the experience in the district & nationally since 2007 in part reflects local section prices falling more, but also in part reflects fewer of the better quality, higher-priced sections selling.”

 

A reasonably strong cyclical upturn in section sales has occurred nationally this year, driven by low interest rates & stronger population growth and aided to some extent by lower section prices. “The Northland coastal & resort areas will have benefited to some extent by these developments. However, the boost in demand has so far made only a limited dent in the supply side of sections in these markets. We believe these oversupplied markets will be a greater risk when the next downturn in national demand occurs.

 

“Ultimately, we expect the adverse demand-supply balances to result in median section prices in most, if not all, of these Northland areas being lower relative to the national median section price than was the case before the boom, but it looks like being a slow adjustment process.

 

“When would-be vendors are not willing to cut asking prices sufficiently to clear the market, the number of sales will remain low. When sale volumes are low, the sections that sell will generally overstate the ‘equilibrium’ or ‘clearing’ level of prices. This is because the relatively small number of sections that are selling are generally selling to the small group of buyers willing to pay top-dollar.

 

“However, with the volume of sales low, it means it will take a long time to sell the number of sections in search of new owners, which means the adjustment in sections prices will be a drawn-out affair, although part of the adjustment will come via inflation eating into asking prices.”

 

Website: Property Insights, Northland update

Northland coastal section markets revisited

 

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Attribution: Rodney Dickens’ Property Insights, story written by Bob Dey for the Bob Dey Property Report.

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