Archive | Agency

Spread of sales & leases by Shore agents

Latest transactions signed by Bayleys’ North Shore agents included sale of a hostel in the university precinct of downtown Auckland, the lease on a Ranui shop and a sale & 2 leases in the Rosedale area of Albany.

Sales

CBD

Uptown

47 St Paul St, unit 2B:
Features: 179m² 10-room Central Hostel, parking space
Outcome: sold in September for $1.18 million + gst
Agent: David Han

North-east

Rosedale

27-29 William Pickering Drive, unit F4:
Features: 210m² office, 6 parking spaces
Rent: about $55,600/year net + gst
Outcome: sold in September for $765,000 + gst at a 7.27% yield
Agents: Ildy Meixner & Alex Strever

Leases

North-east

Rosedale

1-3 Parkhead Place, unit 2:
Features: 448m² office unit, 9 parking spaces
Rent: leased in September for $95,000/year net + gst, parking $16/space/week      
Agents: Alex Strever, Laurie Burt & Matt Mimmack

10 Vega Place, unit G:
Features: 330m² industrial unit – warehouse 190m², showroom 70m², office 70m², 6 parking spaces
Rent: leased in September for $53,000/year net + gst, premises rental $160.61 (including parking)
Agents: Alex Strever & Laurie Burt

North-west

Ranui

20B Pooks Rd:
Features: 90m² retail
Rent: leased in August for $20,000/year net + gst, premises rental $222/m²
Agents: Dev Choudhury & Damian Stephen

Attribution: Agency release.

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Wigram sale, 6 commercial leases in Auckland & Canterbury

Knight Frank agents have reported a Wigram warehouse sale in Canterbury and 6 commercial leases in Auckland & Christchurch.

Sale

South Island – Canterbury

Wigram

22 Sonter Rd, unit 1:
Features: 470m² warehouse, 180m² office/showroom
Outcome: sold for $1.45 million at a 5.4% yield (market yield 6.5%)
Agent: Craig Edwards

Leases

South

Favona

70 Favona Rd:
Features: 1500m² industrial yard
Agent: Scott Worrall

Papakura

14B Vernon St:
Features: 250m² warehouse unit
Rent: $34,000/year + gst + opex 
Agent: Josh Franklin

South Island – Canterbury

Burnside

41 Sir William Pickering Drive, unit 5:
Features: 74m² ground-floor office unit, 3 parking spaces
Rent: $21,990/year net + gst + opex      
Agent: Campbell Taylor

CBD

48 Fitzgerald Avenue, unit 11:
Features: 347m² warehouse, 246m² showroom, 8 parking spaces
Rent: $82,000/year net + gst + opex      

Agents: Sam Stone & Elliot Clayton

68 Fitzgerald Avenue, part level 1:
Features: 159m² first-floor office tenancy, 4 parking spaces
Rent: $47,909/year net + gst + opex      
Outcome:
Agent: Tom Lax

Innovation Precinct, 181 High St, unit D3:
Features: 99² ground-floor retail tenancy
Rent: $49,005/year net + gst + opex
Agent: Tom Lax

Attribution: Agency release.

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Summit on Symonds commercial units & Grey Lynn demolition yard sell

3 commercial units on the ground floor of the Summit on Symonds building (pictured), at the corner of Karangahape Rd & Symonds St at the top of the cbd, have been sold by Bayleys agent Millie Liang.

Also sold is a Grey Lynn property currently used as a demolition yard.

CBD

Uptown

Summit on Symonds, 103-105 Symonds St, new retail units on ground floor of apartment building on the corner of Karangahape Rd:

105 Symonds St, unit 9:
Features: 43m² unit occupied by Wash Station NZ laundromat
Rent: 8-year lease from March 2016, 2 4-year rights of renewal, 2% annual rental increases & reviews to market every 4 years       
Outcome: sold for $570,000 at a 5.33% yield
Agent: Millie Liang

103 Symonds St, unit 10:
Features: 40m² unit, parking space, occupied by physiotherapist
Rent: 3-year lease from August, 2 3-year rights of renewal, 2% annual rental increases & reviews to market at renewal
Outcome: sold for $600,000 at a 5.2% yield
Agent: Millie Liang

105 Symonds St, unit 11:
Features: 68m² unit occupied by The Corner Café
Rent: 8-year lease from March 2016, 2 4-year rights of renewal, 2% annual rental increases & reviews to market every 4 years
Outcome: sold for $890,000 at a 5.37% yield
Agent: Millie Liang

Isthmus west

Grey Lynn

18 Westmoreland St:
Features: 2782m² development site zoned mixed use (18m height limit), warehouse & office building of about 1850m², currently used as demolition sales yard
Outcome: sold with vacant possession for $8.5 million at $3055/m²
Agent: Alan Haydock

Attribution: Agency release.

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More apartments? Not under this tightening scenario

The political call is for housing that’s more affordable, and more of it. Construction costs militate against the first hope, and a combination of central bank constraints & tightening of commercial bank asset quality ratios is likely to deal with the second.

Auckland specialist apartment agency City Sales, headed by Martin Dunn, has produced its own research – out today – which indicates an easing in supply over the next 3 years and a sharp drop in supply in 2021.

The graph shows a dead market post-global financial crisis, returning to life in 2015 and growing strongly for the last 2 years. This year Mr Dunn expects close to 1500 completions, falling to a range of 1000-1300 over the next 3 years, then dropping sharply to fewer than 500 as regulatory constraints have their impact.

Off-plan stock unsold after regulatory changes

City Sales owner Martin Dunn.

Mr Dunn said the agency’s research was based on fact, not hope. Already, the agency has had parcels of unsold off-the-plans stock in new developments to take to the market after investors failed to proceed with their purchase.

Some had borrowed for their deposit and were unable to produce the balance. Others had to walk away because of the 40% equity ratio now required of investors.

He expects more of that as new developments are completed, and said this week the impact would result in a marked slowdown in development.

“The banks call the shots on supply,” Mr Dunn said in his latest market report.

The big 4 New Zealand banks are Australian-owned, and the Australian Prudential Regulatory Authority warned them at the end of July that it would require common equity tier 1 capital ratios of at least 10.5% to meet the authority’s “unquestionably strong” benchmark. That meant all had to tighten their lending and adjust the ratios for different market sectors.

Mr Dunn said City Sales had assessed proposed developments – many not yet unveiled – and determined the likelihood that they’d proceed.

One unknown at the moment is the amount of Chinese money available to China’s overseas developers. Already the screws have tightened on the availability of funds to individuals buying outside China for investment, but the position for developers has been varied.

There were some suggestions emanating from China this week that funding might be freed up, but I haven’t verified that yet.

Other market factors

Other market factors are the returns to investors – who have been integral to making any apartment development work, because they form about 80% of the market, but may have their domination reduced – and development costs.

According to City Sales’ market report – based on figures from its own transactions dating back to 2005, including sales of both new apartments & secondary stock, and from its property management business – average sale prices would continue upward: “Uber, electric cards, congestion & Boomer empty nesters are normalising Auckland central living and it’s an exciting moment. Have a look at K’ Rd these days.”

Mr Dunn said prices of the top secondary stock had eased recently, from $10,000/m² to about $8500/m² as sales volume dropped: “Uncertainty often ‘pumps the brakes’ on a largely investor-driven market, however City Sales sees activity returning to a familiar pace in the coming months.”

Finance, the investor as predator, contributing costs

The City Sales picture is accurate as the market stands. Politicians & bankers can change that overnight. They can also get things wrong, especially when they’re arguing for more supply but activating supply-reducing measures.

One of the ironies has been the clamour to lock investors out. Auckland would have no apartments in its city centre without investors, who were sought in presentations locally, in Singapore, Kuala Lumpur, Hong Kong & London over the last 20 years.

Investors in suburban homes have always made up a proportion of the market – as low as 30%, currently about 40%. Their presence has ensured there’s a stock of upgraded homes, something the management of Housing NZ by political windchange has ensured has not been the case with the state-owned stock.

The biggest change has come with the advent of the international investor, seeking to pop money into whichever market offers the best speculative opportunity. Auckland, Australia’s eastern state capitals & some Canadian cities have been prime targets.

That investment is easily regulated. Outside the investment in both new & existing stock, the other 2 cost issues are land price & construction cost. In Auckland, the greater ability to build more intensively through a wide swathe of suburbia will gradually change land costs, more than removing urban boundaries on the perimeters, where major infrastructure installation is required first.

And construction cost? Fletcher Building Ltd took the smart step long ago to create a vertical supply chain, something which makes it hard for any newcomer to match at any supply point. That vertical integration plus the lack of competition generally make it hard to lower material costs, while the construction sector has been slow to adapt to new ways.

Links:
City Sales
APRA benchmarks release, 19 July 2017

Attribution: Discussion, City Sales report, APRA.

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4 provincial sales for Bayleys

Bayleys has sold 4 properties down country in its Total Property auction series – in Tairua, Taupiri, Opotiki & Lower Hutt.

South of the Bombays

Bay of Plenty

Opotiki

108 Church St:
Features: 413mcbd site, 330m2 building occupied by ANZ Bank since construction in 1985
Rent: $48,685/year net + gst       
Outcome: sold for $516,000 at a 9.44% yield, bank currently on a one-year lease from July with 5 one-year rights of renewal
Agents: Brendon & Lynn Bradley and Kim Williams

Coromandel

Tairua

148 Main Rd:
Features: 822mcommercially zoned site on State Highway 25, single-level streetfront building with established bakery tenancy, 3 storage sheds at rear
Rent: $29,807/year net + gst
Outcome: sold for $553,000 at a 5.39% yield
Agents: Josh Smith & Belinda Sammons

Waikato

Taupiri

1 Railway Rd:
Features: 3948m2 site, 986m2 Fonterra subsidiary Farm Source rural supply services store
Rent: $137,842/year net + gst
Outcome: sold for $2.25 million at a 6.12% yield, 8-year lease runs until 2023, 4 3-year eights of renewal
Agent: Josh Smith

Wellington

Lower Hutt

305 Jackson St:
Features: 290m2 site, 175m2 single-level office building, 71% new building standard seismic assessment
Rent: assessed potential rent $43,700/year net + gst   
Outcome: sold with vacant possession for $676,000
Agents: Andrew Smith & Paul Cudby

Attribution: Agency release.

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Office building in new intensive housing zone sells

An office building (pictured) in Panmure now zoned for terrace housing & apartments sold at a flat 5% yield at NAI Harcourts’ auction yesterday.

Isthmus east

Panmure

2 Kings Rd:
Features: 951m² corner section, 509m² floor area, in new terrace housing & apartment buildings zone
Rent: $66,625/year net + gst + outgoings, one year remaining on lease
Outcome: sold for $1.33 million
Agents: Peta Laery & Richard White

Attribution: Agency release.

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8 out of 10 sell at Bayleys commercial auction

8 of the 10 properties in Bayleys’ Total Property commercial auction yesterday were sold under the hammer.

6 of them were vacant or with short leases. Of the 3 where a yield could be calculated, an Asian supermarket in Papakura (outlined in picture) sold at 4.7%, a Grange hair salon at Warkworth sold at 5.9% and a Birkenhead property with 5 tenants sold at 6%.

Isthmus east

Onehunga

12 George Terrace:
Features: vacant 521m² site, 515m² refurbished standalone industrial building, zone allows live/work or residential
Outcome: sold for $1.4 million
Agents: James Valintine & William Gubb

Parnell

11 Farnham St:
Features: 269m² site, standalone building with 4 levels built 10 years ago, 659m² floor area, private lift to penthouse on top 2 floors, conservatory, 4 bedrooms, 5/6-car garage + secured yard parking on ground floor, partitioned office & amenities on level 1, air-conditioned on levels 1-3
Outcome: sold for $3.22 million
Agents: Millie Liang

St Johns

121 Morrin Rd:
Features: 4755m² site, 2312m² high stud warehouse, 6 roller doors, small office, yard + parking
Rent: short-term tenancy in place
Outcome: sold for $6.81 million
Agents: Jamsheed Sidhwa, Luke Carran & James Valintine

North-east

Birkenhead

49-55 Birkenhead Avenue:
Features: 801m² site, 481m² floor area, 5 tenants, town centre zoning has 21m height limit
Rent: $112,070/year net + gst
Outcome: sold for $1.867 million at a 6% yield
Agents: Michael Nees, David Huang & Oscar Kuang

Browns Bay

755 Beach Rd:
Features: vacant 1029m² site, 70m² building, mixed use zoning allows building height up to 4 storeys
Outcome: passed in at $700,000
Agents: Ranjan Unka & Anna Radkevich

Rosedale

372 Rosedale Rd, unit 2A:
Features: 186.7m² first-floor office, 6 parking spaces, tenant Bayleys Real Estate Ltd
Rent: $58,209/year net + gst + outgoings, 18-month lease from 1 April, 2 18-month rights of renewal
Outcome: no bid
Agents: Matt Mimmack & Eddie Zhong

Unsworth Heights

1 Greenwich Way, shop 7:
Features: 186m² retail unit, tenant BookPrint Ltd
Rent: $51,520/year net + gst + outgoings
Outcome: withdrawn from auction
Agents: Dean Gilbert-Smith & Adam Curtis

Warkworth

The Grange, 67 Auckland Rd, unit 22A & 22B:
Features: 119m² shop, tenant Vivo Beauty Ltd
Rent: $49,100/year net + gst, new 8-year lease
Outcome: sold by the developer, Square & Main Street Ltd (Adam Reynolds) for $830,000 at a 5.9% yield
Agents: Matt Lee, James Chan & Henry Napier

North-west

Henderson

111 Lincoln Rd, unit FB:
Features: retail unit, tenant Petstock
Rent: $105,000/year net + gst, new 6-year lease
Outcome: withdrawn from auction
Agents: Tony Chaudhary & James Chan

South

East Tamaki

20 Ra Ora Drive:
Features: vacant 4885m² site, metalled, fenced & electronic security gate, former Howick Bus Co Ltd depot
Outcome: sold for $2 million
Agents: John Bolton, Roy Rudolph & Katie Wu

Papakura

303-305 Great South Rd:
Features: 2023m² site zoned business mixed use, Asian supermarket tenant
Rent: $161,740/year net + gst, new 4-year lease + 3 4-year rights of renewal
Outcome: sold for $3.44 million at a 4.7% yield
Agents: Quinn Ngo, Matt Lee & Piyush Kumar

Takanini

305 Great South Rd:
Features: vacant 990m² industrial site, 448m² warehouse
Outcome: sold for $1.52 million
Agents: Shane Snijder & Peter Migounoff

Attribution: Auction.

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2 warehouses sell at yields under 5.2%

2 warehouses in Penrose & Mt Wellington were sold on firm yields at Colliers’ auction yesterday – 4.79% on the Greenpark Rd property (pictured) and 5.17% in Mt Wellington.

A third property, a mix of office & warehouse used for clothing storage but offered vacant, attracted no bid but was under negotiation post-auction.

Isthmus east

Mt Wellington

7A Te Apunga Place:
Features: 3012m² site zoned light industrial, 732m² net lettable area – warehouse 472m², storage 144m², office & amenities 116m², tenant Visor Distributors (2017) Ltd
Rent: $120,000/year net + gst, new 6-year lease from 30 June, 2 3-year rights of renewal
Outcome: sold for $2.32 million at a 5.17% yield
Agents: Hamish West & Todd Kuzmich

Parnell

33C Falcon St, unit 3D:
Features: 643m² office & warehouse offered vacant – offices 299m², amenities 22m², storage 44m², warehouse 249m², loading bay 29m², 5.25m stud in warehouse, roller door, 12 stacked parking spaces, one in open
Outcome: passed in, only bid was from vendor at $2 million
Agents: David Burley & John Davies

Penrose

4-6 Greenpark Rd:
Features: 1160m² site zoned light industrial, 584m² net lettable area – warehouse 317m², offices & amenities 102m², showrooms 166m², canopy 8m², tenant Vesta Electrical Supplies Ltd
Rent: $78,000/year net + gst, initial lease term expires 30 April 2021, 2 4-year rights of renewal
Outcome: sold for $1.63 million at a 4.79% yield
Agents: Paul Jarvie, Brad Johnston & Matt Prentice

Attribution: Auction.

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2 industrial leases & a sale

Colliers agents have leased a large new Goodman Property Trust warehouse in Penrose, an Avondale industrial property and sold an Invercargill warehouse.

Isthmus east

Penrose

Gate Industry Park, 395 Church St:
Features: 6723m² industrial property – warehouse 4223m², stud height 9m, warehouse amenities 333m², enclosed canopy 941m², air-conditioned offices 1226m² over 2 floors, yard 2300m², 55 parking spaces, leased by Goodman Property Trust to Easy2C Ltd for a term of 5 years & 3 months
Rent: $600,726.20/year net + gst
Agents: Andrew Hooper & Greg Goldfinch

Isthmus west

Avondale

17-19 Patiki Rd:
Features: 4878m², leased to Glidepath Ltd
Rent: $620,000/year net + gst     
Agents: Dwayne Warby & Shoneet Chand

South Island

Invercargill

5 Liddell St:
Features: 1827m², warehouse & showroom leased to Ideal Electric Ltd
Outcome: sold for $1,001,500 at a 7% yield
Agents: Mark Simpson & Rory O’Donnell

Attribution: Agency release & promotional material.

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2 NZ Post properties sell in Christchurch

2 NZ Post properties were sold in Christchurch on Friday to start Bayleys’ sixth Total Property commercial auction series for the year. An Ashburton property was passed in.

The auction series comes to Auckland today, with 10 properties on the auction list.

South Island

Canterbury

Ashburton

390-400 East St:
Features: 994m² corner site in Ashburton’s main street, 1329m² building, 3-year ground-floor lease from settlement to NZ Post & Kiwibank, 2 upstairs monthly tenancies, 396m² of vacant space
Rent: $56,052/year net + gst
Outcome: passed in at $425,000
Agents: Blair Young & Mitchell Wallace

Christchurch

Bishopdale

31 Bishopdale Court (pictured above):
Features: 278m² site, 309m² refurbished & strengthened building; 6-year lease until October 2022, with 2 3-year rights of renewal to arts supplies, giftware & book retailer Paper Tree, which also has NZ Post & Kiwibank services contract that includes 534 postboxes
Rent: $62,000 /year net + gst
Outcome: sold for $1.1 million at a 5.64% yield
Agents: Blair Young & Mitchell Wallace

Woolston

713 Ferry Rd:
Features: 566m² corner site adjacent to recently opened New World supermarket, 320m² standalone building – 201m² Discount Dairy tenancy which holds NZ Post services contract with 590 postboxes on lease until June 2024, and 119m² occupied by laundromat with a lease until February 2023
Rent: $60,832/year net + gst
Outcome: sold for $871,000 at 6.98% yield
Agents: Blair Young & Mitchell Wallace

Attribution: Agency release.

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