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Bayleys auction action

Porana Rd units sell

Wairau Valley industrial:Bayleys sold three industrial units on Porana Rd, Glenfield, at auction or soon after last week, with another two under negotiation.

The units were among seven at 59-63 Porana Rd, in the Wairau Valley, taken to market, each with two parking spaces. Unit 10, 76m², sold for $65,000 ($855.26/m²), unit 13 and unit 15 for $70,000 each ($921.05/m²). The double-sized unit 19 is under negotiation with a top bid of $140,000 and the double offering of units 11 (78.3m²) and 12 (the standard 76m²) is under negotiation after a top bid of $130,000.

At 39 View Rd, Glenfield, unit 1 is under negotiation after a top bid of $140,000. It’s a 295m² high-stud warehouse with office space and five parking spaces.

East Tamaki industrial: At East Tamaki, a 280m² industrial building at 21B Stonedon Drive is under negotiation after a top bid of $130,000.

Remuera retail: In the heart of the Remuera shops, two units taken to the market for the first time in 53 years were sold for $770,000. The shops, at 352-354 Remuera Rd, are returning $63,872, giving an 8.3% yield.

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Colliers completes auction of 51 KFC outlets

Wellington auction grosses $15.2 million at 8.65% yield

Colliers Jardine continued its run of success with sales of KFC outlets for Restaurant Brands NZ Ltd, disposing of 15 in the southern half of the North Island at auction in Wellington on Friday for a total $15.2 million at an average yield of 8.65%.

The first 26 were sold at auction in Auckland on Wednesday. A single buyer, name so far undisclosed, bought the 10 South Island KFC outlets an hour before the Auckland auction. They were to have been offered for sale on Thursday.

Wellington auction results:

Wellington region

Hutt Central, $1.025 million, 9.36%.

Kent Terrace, $1.47 million, 7.26% yield.

Kilbirnie, $1.37 million, 7.91%.

Johnsonville, $1.185 million, 8.08%.

Lower Hutt, $917,000, 8.59%.

Upper Hutt, $1.001 million, 9.23%.

Provincial

Dannevirke, $406,000, 8.79%.

Feilding, $640,000, 8.94%.

Hastings, $1.185 million, 8.88%.

Hawera, $630,000, 9.39%.

Levin, $810,000, 8.89%.

Napier, $1.02 million, 8.78%.

New Plymouth, $1.28 million, 8.97%.

Palmerston North, $1.14 million, 8.95%.

Wanganui, $1.155 million, 9.06%.

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Bayleys signs record $3 billion of deals

Transaction number up 20% to 5374

The Bayleys real estate group signed up a record $3.021 billion worth of property business in the March 2002 year, a 35% increase, from a 20% rise in transactions — 5374 through the group’s 32 offices.

Bayleys Corp managing director Jeff Davidson (left) said the figures the increased level of activity in all sectors of the property market.

“It’s been a very buoyant year for the real estate industry. What’s been particularly encouraging has been the significant pickup in metropolitan markets, which have benefited from the low interest rate environment, stronger economic activity & rural investors buying urban properties.”

Bayleys’ largest transaction for the year was its $31.1 million sale of Novell House in Wellington to Capital Properties NZ Ltd.h

$1-10 million trades a feature

However, Mr Davidson said a feature of the year was the substantial increase in sales of properties between $1-10 million across all sectors of the market. Bayleys sold 16 homes for more than $1 million in its Auckland auction rooms in February & March, twice the number for the same period in 2001.

Mr Davidson said the commercial & industrial market had experienced its best year in a long time and the rural property market was also continuing to perform strongly.

Bayleys’ increased share of the country market, which now accounts for about 20% of its business, had also contributed substantially to the growth in the group’s revenue.

Expats boost figures

Mr Davidson said a pleasing feature of the market has been the increased level of inquiry from & sales to expatriate New Zealanders, fuelled by lifestyle perceptions and attractive interest & exchange rates.

“They are either investing back here or, in an increasing number of cases, looking to return home, particularly since 11 September.”

Mr Davidson said the Reserve Bank’s recent lifting of the official cash rate might lead to some levelling off in the market.

“While interest rates are likely to edge up further, they are expected to remain at relatively low levels in historical terms, which will continue to be positive for property.”

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B&T says residential market eased in November

Sales market slips, rentals steady

Barfoot & Thompson said today latest sales figures showed there were signs of a slight easing in the Auckland real estate property market during November. The shortage of stock had reached a 5-year low, but fresh stock came on the market in November to ease the pressure.

Barfoot’s ended the month with 4332 properties on its books, an 8% rise on the previous month compared to the usual November influx of about 3%. However stock levels are still almost 20% below the level a year ago.

The average Auckland sale price dropped back to $414,742 from a record $422,001 in October, but that was skewed by a single $7 million sale. Just over 40% of sales were above $500,000.

Sales volume eased from 1472 in October to 1306.

The rental market was steady with 633 houses & units let. The average weekly rental was $330, up from $329 in October.

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Kingfish Lodge out to tender

One of the offerings in Bayley’s latest Waterfront collection

Kingfish Lodge on Whangaroa Harbour, a secluded haven just north of the Bay of Islands, has been put out to tender through Bayleys, closing on 7 December.

Owner Eb Leary recently failed in a court attempt to get access over the hill from Tauranga Bay, across his neighbours’ properties.

But Bayleys’ new Waterfront magazine, promoting a lineup of exquisite waterfront properties for sale around New Zealand and in Fiji, shows the 12ha Kingfish Lodge property does have approval for subdivision into 11 lots, leaving the lodge itself to continue as a going concern.

A more rugged site — 383ha of Knuckle Pt on the Karikari Peninsula in a variety of block sizes — heads the Waterfront sale list. These lots are up for sale with a price guide ranging from $400,000 to $1.5 million.

At Waitata Bay in the Bay of Islands, a 20ha property with riparian rights has a price-guide tag of $4.1 million, with the possibility of taking smaller lots priced from $650,000 to $1.5 million.

There’s only one offering in the place now attracting most attention from coastal investors — Great Barrier Island. This one is 32ha on Ships Bay, Tryphena, which will go to auction on 14 February 2001.

The Beachcomber Resort at Paihia is included in the selection, with a tender closing date of 30 November.

Coromandel offerings are the Island View Estate at Tairua and 6.6ha at Hahei.

Other offerings include houses and apartments in Auckland — and the 1510ha Homestead Station, which covers 15% of the Mahia Peninsula at the top of Hawke’s Bay.

Among the Fijian offerings are 96 sections in three residential neighbourhoods on Denarau Island.

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$14 million from second day of Bayleys’ Total Portfolio auction series

Wide range of properties sold

Bayleys Real Estate sold 14 properties for about $14 million on the second day of its Total Property auction series, run in two sessions in Auckland.

Thirteen of the properties were sold for $10.66 million. The 14th, a Papakura building with government tenants, was sold for an undisclosed sum. Given yield levels in other sales, that sale would have been for around $3 million.

The Auckland sales:

Albany, Rosedale Rd, 4.1177ha development site zoned business 9, sold for $3.55 million (at $86/m²) to a developer who intends subdividing it.

Warkworth, Baxter St, 282m² Westpac Bank building attracted fierce bidding before selling for $737,500 at a 7.6% yield. Westpac has a lease until 2005 over the building, which adjoins a two-level parking building.

Remuera, 305 Remuera Rd, 357m² retail/office building containing ground-floor hair salon & restaurant, short-term office tenancy upstairs, sold for $1.193 million at a 10.4% yield.

Takapuna, Huron St, four-level 1368m² former district court building (complete with cells) sold vacant for $980,000.

City, 3 Shortland St, a 217m² retail outlet in the former NZI foyer currently being given a $200,000 fitout by Australian fashion company Mambo Surfwear, sold for $970,000 at a 9.7% yield with a 6+3 lease in place.

Manurewa, 236 Great South Rd, 1004m² former State Insurance building, sold for $657,000 at a 12.55% yield on leases to three professional services tenancies.

Papakura, corner Croskery & Hunua Rds, 1422m² vacant high-stud factory with gantry crane on 9622m² site, sold for $630,000.

Avondale, 31 Patiki Rd, 1978m² level development site with 62m street frontage, sold for $361,000 with current holding income of $22,880/year from monthly tenancy.

Takapuna, 60 Barrys Pt Rd, 901m² five-unit industrial building in need of maintenance, on 937m² site, sold for $455,000. Three of the units are producing total $32,000 income, the other two are vacant.

East Tamaki, 46 Sir William Ave, 613m² high-stud warehouse, office & showroom complex, sold vacant for $400,000.

East Tamaki, 7A Ra Ora Drive, 466m² warehouse/showroom & office building, sold vacant for $305,000.

City, 17 Albert St, 127m² 8th floor office suite, with new three-year lease to Tourism Auckland, sold for $235,000 at 11.65% yield.

Papakura, 20-22 Queen St, 2158m² office building with new six-year leases to WINZ and Child Youth & Family Division, producing gross income of $304,000, sold for undisclosed price.

Whitianga, corner Campbell & Isobella Sts, redevelopment site sold for $181,500.

Wendy’s restaurants, three Wendy’s premises in Auckland with 12-year leasebacks to Wendco NZ Ltd, sold in tender for undisclosed prices.

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CB Richard Ellis appointments

Dickie becomes director

CB Richard Ellis has made Simon Dickie a director and appointed Tim Arnott as an associate director. Mr Dickie was an associate director, in charge of the retail services division. Mr Arnott is in the valuation & advisory services division and specialises in retail valuation. Both are Auckland-based.

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propbd Diary 2003 – Agency

MARCH

Tenders, expressions of interest:

St Clair Park Village, Te Atatu South, 166 McLeod Rd, mortgagee sale (St Clair Park Ltd, director John Ede – see U column references), 5.7ha, much of the infrastructure done, some homes completed, international tender closes 20 March; Roger Seavill, Colliers.

FEBRUARY

Tenders, expressions of interest:

Next to TelstraClear Pacific Events Centre, Wiri, Great South Rd, business 5-zoned 10.1ha sandwiched between Great South Rd & Southern Motorway, Manukau City Council divesting to fund events centre, tender closes Thursday 27 February; Chris Bayley & Marty Roestenburg, Bayleys East Tamaki.

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Bayleys’ formal link with Cushman & Wakefield begins

It’s a new style, but David Bayley vows he’ll stay a commission salesman

Bayleys Real Estate has been formally drawn into a business sphere where the directors are not entirely at home, but where they feel they must go.

Bayleys, the homegrown success which has triumphed over the efforts of its international competitors through difficult times in the 90s and collected the bulk of the apartment projects trade, has a history of aggressive commission trade, much of it based on the auction room.

The Auckland-based firm effectively quit its alliance with the DTZ organisation when it sold its stake in DTZ Sydney to Melbourne directors, becoming the only major commercial real estate business in New Zealand without an international affiliation.

The others — CB Richard Ellis, Colliers Jardine and Jones Lang LaSalle — all have foreign origins, two have American stock exchange listings and Colliers Jardine is part of the Hong Kong-based Jardine empire, which has numerous listings.

Bayleys formally began its alliance with the New York-based Cushman & Wakefield organisation on 1 October, giving it a leg back into the international corporate real estate world, where its DTZ connection had only partially taken it.

Mitsubishi at head of family

The Cushman & Wakefield family tree starts in Japan with Mitsubishi Estates, which owns 100% of Rockefeller Corporation, which in turn owns 80% of Cushman & Wakefield. The other 20% is held by senior executives. The head Cushman & Wakefield organisation owns 75% of its Asian operation, with the other 25% held jointly by the Grosvenor Estate of London and the family of Sir Run Run Shaw.

The culture of corporate real estate business is quite different from the Bayleys tradition, as David Bayley and Cushman &Wakefield Asia chairman Paul Orchard-Lisle pointed out during an interview on Monday.

The first thing to get the locals’ heads around is that the early commission they’re used to doesn’t come until the end in these big international transactions, and these deals will also not be handled by the broking division but will be run by a new corporate division, with brokers’ input.

We’re agents — this takes new-generation pros, says David Bayley (below)

“JB [David Bayley’s brother and fellow Bayleys Corporation director, John] and I are not going to change. We’re first and foremost commission salespeople. However, there is a huge opportunity within the corporate real estate services business and to do that we have to bring on different people.

“The brokerage has to come at the end. It will be headed by Michael Bayley, my son, 26, BCom, marketing-type person who has the qualifications to drive it,” David Bayley said.

He said the Auckland company was a hands-on organisation, and it has gained a certain amount of international experience by hawking apartment projects around Asia, particularly in Singapore.

“We’re hands-on. I don’t know that we’ve been missing a lot of business in Singapore, but certainly in Hong Kong, South Korea, Taiwan.” Bayleys gets a lot of inquiry from the US; a link there was very important to Bayleys and Mr Bayley expects the new alliance will increase the amount of business from that quarter.

Mr Orchard-Lisle (right) carries numerous titles, including several in English educational circles. He joined Healey & Baker after graduating from Cambridge in 1961, and his new job from last year has been as chairman and chief executive of Healey & Baker Investment Advisors Inc, now a subsidiary of Cushman & Wakefield. He is on the board of the new parent and chairman of its Asian division.

He says the US and European experience recently has been for broker numbers to fall and the members of other professions involved in real estate firms to rise, with a move away from the commission-only basis.

Biotech opportunities an example

The biotech industry is one where international links are important, and where he sees this change occurring: “There are three issues for the biotech people. One is to find an optimum climate to enjoy working in, two is finding the staff and three is a university link.”

Into this equation, the labour supply on the US west coast is looking expensive, so the international links to find alternative business bases become important.

Mr Orchard-Lisle said an important factor for Cushman & Wakefield was the strength of research at Bayleys. This is an area where the group will differ internationally from its competitors, which generally have a central output for publicised international research. Because of the way it is handled, this research is often very old by the time it reaches its audience.

The Cushman & Wakefield style will be to have several heads of research around the world, so each is running a different segment of research in parallel with the others.

They will also produce a monthly snapshot of business, market action and statistics in their area, which will be available in pdf form on the Cushman & Wakefield website (www.cushwake.com for the international business, www.cushwakeasia.com for the Hong Kong-based Asian business).

David Hearn, a Canadian who became managing director corporate services for Asia six months ago, said the firm had about 160 corporate clients, and two issues for them were a uniform approach and consistent delivery standards.

Some have taken Cushman & Wakefield people inhouse as property operations manager, distinguishing these people, with the task of doing the best for the client, from the broker with the attitude of “what you kill is what you eat.”

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ANZ auction yields firm by 1.5%

18 branches sell for $12 million

ANZ Bank’s 35-property branch auction began in Auckland on Tuesday at the whip-cracking speed of a stockyard sale, and saw huge gains over prices that would have been likely before the World Trade Centre terrorist attack.

As world sharemarkets tumbled and investors looked for different options, “it certainly changed investment attitudes,” Colliers Jardine director John Goddard said.

Mike Judd, who has put together several bank portfolio auctions for Colliers Jardine, had been expecting an average yield around 10.25%. Instead, the yield on the 18 ANZ properties sold in Auckland was 8.71%.

All 18 properties were sold. In normal circumstances the last property offered, the Kawerau branch, would probably have been too far off the preferred price range for a sale to be achieved. It went for $152,000 on a 14.09% yield.

Only two others were sold on yields in double figures — the Kaitaia & Papakura branches, on yields of 10.94% & 10.76% respectively.

Most keenly sought was the first property up, the Mt Maunganui branch, sold for $1.12 million on a 6.92% yield. The Devonport branch, sold for $1.112 million on a 7.45% yield, was the only other sale under 8%.

The auction, in the Crowne Plaza (formerly Centra) hotel ballroom, attracted more than 200 people and highly competitive bidding. Bank properties have proved popular offerings in the past, especially among locals keen to own landmarks in their districts, but the six-year leaseback term on all the ANZ branches — with no certainty of a tenant after that — would normally create some market resistance, expressed through stretching of the yield.

The difference between Mr Judd’s expectation and what eventuated amounted to $100,000/branch, or $1.8 million over the total northern offering.

There did not seem to be much difference in buyer attitude between branches in Auckland and those around the Waikato and Bay of Plenty, and the two-hour auction brought just over $12 million in sales.

Sales

Auckland:

Devonport, $1.112 million, 7.45%.

Henderson, $912,000, 8.77%.

Newton, $755,000, 8.89%.

Panmure, $620,000, 9.23%.

Papakura, $1.014 million, 10.76%.

Remuera, $1.38 million, 8.71%.

St Heliers, $1.3 million, yield 8.08%.

Bay of Plenty:

Kawerau, $152,000, 14.09%.

Mt Maunganui, $1.12 million, 6.92%.

Te Puke, $421,000, 8.43%.

King Country:

Otorohanga, $321,000, 9.1%.

Te Kuiti, $306,000, 9.33%.

Northland:

Kaitaia, $282,000, 10.94%.

Waikato:

Cambridge, $429,000, 8.26%.

Matamata, $500,000, 8.1%.

Morrinsville, $488,000, 8.98%.

Te Awamutu, $635,000, 8.73%.

Tokoroa, $326,000, 9.98%.

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