Archive | Market

Development pipeline changes outlook of suburban apartment sector

Suburban owner-occupier apartments are becoming an increasingly significant component of Auckland’s apartment market, CBRE research shows.

Investors have always formed part of the suburban sector – well over half the market until early 2015, as the research paper shows. But, as investment apartment numbers stuck at around 1200, the owner-occupier share has steadily grown every quarter since mid-2015.

In the paper released on Monday, CBRE Research senior director Zoltan Moricz & senior analyst Tamba Carleton said steady growth in development of suburban owner-occupier apartments over the last 18 months meant they now accounted for a quarter of the current pipeline and, should all projects proceed to completion, suburban owner-occupier stock would double by the end of 2019.

“Although this boom in supply is well above long-term averages, the majority of the pipeline is presold. And, while there are a range of complex issues constraining the market, there is sizeable growth potential for suburban owner-occupier apartment development in the near future.”

CBRE’s researchers counted 2280 suburban owner-occupier units built between 1995 and the first part of 2017. The pipeline is nearly as big as the volume constructed over the last 20 years, with 2190 units planned to be completed between now and the end of 2019.

“This level of growth is unprecedented in Auckland’s history, and is reflective of a structural shift in housing composition & societal attitudes toward density. Early adopter buy-in has been highly localised, with a high proportion of presale buyers either living in or at least familiar with the area.

“There has been limited buyer resistance, with comparatively few of the 20 suburban project abandonments driven by a lack of buyers. However, in some locations community resistance has shaped the surrounding pipeline or in extreme cases reduced it completely.”

Mr Moricz & Ms Carleton said the buyer stereotype was a downsizing baby-boomer couple, but the reality was “a much more diverse demographic of off-the-plan buyers who make a purchasing decision based on a combination of lifestyle & economic factors. Decisions are based on individual values & beliefs, however there tends to be sufficient buyer interest in projects that are well located, well designed and affordable relative to house prices in the immediate area.”

The researchers highlighted a major challenge facing the market as residential price growth slows – the high cost of development, mostly due to construction costs: “This has a flow-on effect to retail prices, reducing the economic attractiveness of new apartments relative to other types of dwellings and resulting a different outcome when purchasing decisions are made.

“The combination of high development costs with slowing house price growth has contributed to reduced feasibility of mid- to highrise apartments in many suburban locations. This has shifted the focus of the pipeline from purely high density toward variations of the ‘missing middle housing’, including walk-up dwelling typologies & semi-terraced apartments.

“These lower density typologies will appeal to owner-occupiers if they are well located, well designed and affordable relative to house prices in the immediate area and, with the unitary plan allowing more of this development than ever before, the suburban owner-occupier pipeline has significant growth potential moving forward.”

Attribution: CBRE report.

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Christchurch leases signed

Knight Frank agents have signed tenants to 3 new office & warehouse leases around Christchurch.

Leases

South Island – Canterbury

Burnside

49 Sir William Pickering Drive, unit 3:
Features: 100m² first-floor office, 4 parking spaces
Rent: $28,310/year net + gst + opex
Agents: Tom Lax & Campbell Taylor

Rolleston

35 Illinois Drive, unit 10:
Features: 113m² warehouse unit with small office
Rent: $15,500/year net + gst + opex
Agent: Myles Addington

Wigram

22 Sonter Place, unit 1:
Features: 470m² warehouse – 180m² office/showroom, parking
Rent: $78,000/year net + gst + opex
Agent: Craig Edwards

Attribution: Agency release.

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St Marys Bay & Otahuhu apartments sell

A St Marys Bay terrace and a renovated Otahuhu apartment were sold under the hammer at Bayleys’ auctions last week.

Isthmus east

Otahuhu

4 Marjorie Jayne Crescent, unit 3A:
Features: m², renovated 2-bedroom apartment, balcony, 3 parking spaces
Outgoings: rates $/year including gst; body corp levy $/year
Income assessment: $/week
Outcome: sold for $454,000
Agents: Cam Hayde, Caleb Rufer & Ellis Prince

Isthmus west

St Marys Bay

52 New St:
Features: m², 3-bedroom terrace, balcony, parking space
Outgoings: rates $/year including gst; body corp levy $/year
Income assessment: $/week
Outcome: sold for $1.325 million
Agent: Luke McCaw

Attribution: Agency release.

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Petrol station sells on 4.6% yield

A Ponsonby petrol station has been sold on a 4.6% yield and a Morningside warehouse has been leased by Colliers agents. In Christchurch, the agency has sold a Riccarton office building at auction.

Sales

Isthmus west

Ponsonby

47 Jervois Rd:
Features: 550m² unit title, BP petrol station
Outcome: sold for $2.285 million at a 4.6% yield
Agents: David Palmer & John Davies

South Island

Canterbury

Christchurch – Riccarton

15 Leslie Hills Drive:
Features: 832m² site, 354m², 2-storey office building, 9 parking spaces
Rent: $80,000/year net + gst + opex from renewed 2-year lease
Outcome: sold at auction for $902,500
Agents: Mark Macauley & Will Franks

Lease

Isthmus west

Morningside

18-20 Morningside Drive:
Features: 1600m² site, 1300m² warehouse owned by Metge Properties Ltd, 15 parking spaces, new long-term lease to Brownies Mattresses Ltd
Agents: Jonathan Lynch & Leroy Wolland

Attribution: Agency release.

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Offplan.kiwi listings website launches

David Hillier & Jamie Holmes have created a new website aimed at investors in off-the-plan residential developments, OffplanKiwi.

“Purchasing a property prior to its construction is becoming an increasingly common way to buy a home, but until now there has been no single website or sales resource dedicated to buying off the plans,” Mr Hillier said.

“Offplan.kiwi is an online directory for new-build housing & apartment developments which gives users a snapshot of each project and includes imagery, videos, key facts, location, information on price and contact details for the agent or vendor.”

Through their company, architectural visualisation firm One to One Hundred Ltd, the pair provide marketing services to developers & real estate agents selling off-plan projects. They teamed up with developer Peter Gray to build the website.

“We’ve met lots of people who like the idea of buying off the plans but never do anything about it. They just don’t know where to start. Our aim was to give them a simple, comprehensive catalogue of new-build projects so they could do some initial research on which developments fit their purchase criteria before making an inquiry.”

Mr Gray said: “The interactive map lets users navigate fluidly around the city to discover the many different developments we have. It’s so simple to get a good understanding of what’s out there.”

The website differs from Trademe Property or Realestate.co.nz in that it doesn’t include any completed buildings, and listings are on a per-project rather than a per-unit basis.

One to One Hundred doesn’t charge for inquiries and has started by offering free listings while traffic builds up. The website has over 40 Auckland projects including The Pacifica, the International, Wynyard Central, St Marks & Milford Living.

Mr Hillier said Offplan intended to expand its listings to include all the major cities in the country over the next year.

Link:
OffplanKiwi

Attribution: Company release.

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H&M to open at Queensgate

Expanding Swedish fashion retailer H&M (H&M Hennes & Mauritz AB) will open its first Wellington store at the Queensgate shopping centre in Lower Hutt this year.

Centre manager Stride Property Group’s shopping centres general manager, Roy Stansfield, said on Friday the announcement marked an important milestone in a large project, which had been a long time in the works: “We’re incredibly excited that a world-renowned brand like H&M has chosen Queensgate as the location for its first Wellington store. It’s testament to the standard of the centre & the opportunities in the region as a whole. Customers & retailers alike have been curious about the works going on in the centre as we prepare for H&M’s opening, so we’re very happy to be able to finally confirm who this new tenant is.”

Stride hasn’t confirmed the store’s opening date yet.

The Diversified NZ Property Trust, which Stride manages, bought the former Westfield mall from Scentre Group (NZ) Ltd last August. Part of it was closed after the Kaikoura earthquake in November and a portion of the carpark & its cinema complex were demolished. After a partial reopening, the centre was fully reopened in April.

H&M has a big international expansion programme underway, with 500 openings completed or planned this year.

Attribution: Company release.

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Alpha unit sells at auction

An Alpha apartment was sold and one in the Hobson was passed in at Ray White City Apartments’ auction on Friday – delayed a day because of the America’s Cup parade through the city on Thursday.

CBD

Victoria Quarter

The Hobson, 196 Hobson St, unit 4E:
Features: 100m², one bedroom, secure basement parking space
Outgoings: rates $1635/year including gst; body corp levy $5736/year
Income assessment: $595/week until 1 November, appraisal $600-650/week unfurnished
Outcome: passed in at $540,000
Agent: Krister Samuel

Alpha, 17 Vogel Lane, unit 1306:
Features: 2 bedrooms, parking space
Outgoings: rates $1481/year including gst; body corp levy $4616/year
Income assessment: $470/week for unit, $80/week for parking space, current until February 2018, appraisal for unit $500/week
Outcome: sold for $490,000
Agent: Rochelle Henderson

Attribution: Agency.

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One unit sells, 2 passed in well short of asking price

A vacant Quadrant apartment was sold under the hammer and 2 other city apartments were passed in at City Sales’ auction on Wednesday.

The pass-ins went back on the market at substantial premiums to the top bids. A 7th-floor Aura unit was passed in at 6939/m² internal, against $8673/m² sought subsequently. A CityZone unit was passed in at $7727/m² internal, against $9068 sought subsequently. Both had a deck, neither had parking.

CBD

Learning Quarter

The Quadrant, 10 Waterloo Quadrant, unit 1710:
Features: 42m², 2 bedrooms, 15m² deck
Outgoings: rates $1427/year including gst; body corp levy $5105/year
Outcome: sold for $485,000
Agents: Steve Kirk, Habeeb Urrahman & Chris Cairns

Uptown

CityZone, 11 Liverpool St, unit 2005 (20B):
Features: 44m², 2 bedrooms, deck
Outgoings: rates $1240/year including gst; body corp levy $3936/year
Outcome: passed in at $340,000, back on market at $399,000
Agent: Tony Kelly

Victoria Quarter

Aura, 53 Cook St, unit 702:
Features: 49m², 2 bedrooms, deck
Outgoings: rates $1227/year including gst; body corp levy $4738/year
Outcome: passed in at $340,000, back on market at $425,000
Agent: Tony Kelly

Attribution: Auction documents.

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NZL to move Mt Maunganui operations to Tauriko

Freight & logistics company NZL Group Ltd has signed to move its Mt Maunganui operations to a $20 million purpose-built facility at the Tauriko Business Estate, 10km from the port, between state highway 29 over the Kaimais to the Waikato and the highway 36 bypass to Rotorua.

Colliers industrial leasing specialist Rob Schoeser said NZL would move to a high-tech 17,000m² warehouse with a new head office on Whango Place, Tauriko, scheduled for completion in mid-2018.

NZL occupies a site at Mt Maunganui owned by businessman & former MP Bob Clarkson, who will develop the new facility. NZL has signed a 15-year lease with rights of renewals.

Mr Schoeser said the supply of land around NZL’s Mt Maunganui headquarters was limited, and Tauriko was the only area in Tauranga with enough land for such a large development.

Tauriko Business Estate is a 255ha development site, 9.9km from the port of Tauranga.

New Plymouth-based Transport Investments Ltd bought NZL Group a month ago from Ken Harris, who led a management buyout of the group from P&O Australia Ports Pty Ltd in 2006.

Attribution: Agency release, company documents.

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4 sales & 7 leases in latest Bayleys results

Bayleys agents have completed 4 commercial sales on Queen St, in the Heritage Auckland hotel building, at Rosedale and in Petone, and 7 leases in Dairy Flat, Rosedale, Silverdale & the Wellington cbd.

Image above: The former Farmers’ Grand Tearoom in the Heritage Auckland hotel, bought for conversion to a penthouse apartment.

Sales

CBD

Queen St

155 Queen St, units 11A, B & C:
Features: 631m² office unit in 3 titles, 2 parking spaces on separate titles, occupied by NZ Institute of Studies, longer-term residential development potential
Rent: $150,000/year net + gst
Outcome: sold for $1.9 million at a 7.89% yield
Agents: Anna Radkevich & Ranjan Unka

Victoria Quarter

Heritage Auckland, 35 Hobson St:
Features: 539m² on the top floor of the Heritage Auckland Hotel, formerly the Farmers department store’s Grand Tearoom, has operated as a function centre since hotel conversion in the late 1990s; the hotel has indicated it won’t be renewing the 20-year lease expiring in October next year; high stud ornate ceiling, 2 external decks with harbour & city views plus 4 parking spaces
Rent $200,782/year net + gst
Outcome: sold for $2.5 million at an 8.03% yield or $4638/m², buyer has indicated intention to convert to penthouse apartment
Agent: Matt Lee & James Chan

North-east

Rosedale

14 Vega Place, unit C:
Features: 354m² industrial unit, 8 parking spaces, tenant Adrenalin Publishing Ltd in occupation for 16 years and has renewed for a further 4 years from 1 July
Rent $62,420/year net + gst
Outcome: sold for $1.18 million at a 5.29% yield
Agents: Ashton Geisler, Laurie Burt & Mike Adams

South of the Bombays

Petone

2 Jackson St:
Features: 2010m² site, 1500m² store occupied by Kathmandu for 15 years
Rent: $243,000/year net + gst
Outcome: sold for $4.1 million at a 5.92% yield
Agent: Richard Faisandier

Leases

North-east

Dairy Flat

17 Kahikatea Flats Rd, units C1 & C2:
Features: 280.8m² building area – warehouse 150m², office 90m², other area 40.8m², yard 3000m², no parking spaces
Rent: leased in June for $111,450, premises rental $396.90/m²
Agent: Rosemary Wakeman

Rosedale

Part 1-3 Parkhead Place:
Features: 581m² industrial unit – warehouse 411m², office 137m², other area 33m², 8 parking spaces
Rent: leased in June for $80,000/year net + gst, premises rental $137.69/m² (no separate charge for parking)
Agent: Laurie Burt

Silverdale

19 Foundry Rd, unit A:
Features: 142m² industrial unit – warehouse 92m², office 50m², 2 parking spaces
Rent: leased in June for $25,000/year net + gst, premises rental $176.05/m² (no separate charge for parking)
Outcome:
Agent: Rosemary Wakeman

150 Foundry Rd:
Features: 225m² industrial unit – warehouse 150m², office 75m², 4 parking spaces
Rent: leased in June for $32,500/year net + gst, premises rental $144.44/m² (no separate charge for parking)
Agent: Rosemary Wakeman

8 Peters Way:
Features: 1356.6m² office & warehouse – warehouse 976m², office 205m², showroom 175.6m² 21 parking spaces
Rent: leased in June for $195,000/year net + gst, premises rental $143.74/m² (no separate charge for parking)
Outcome:
Agent: Rosemary Wakeman

South of the Bombays

Wellington cbd

20 Customhouse Quay, part level 12:
Features: 349.4m² of A grade office space leased for 7 years
Rent: $242,246/year + gst
Agents: Luke Kershaw & Luke Frecklington

20 Customhouse Quay, part level 12:
Features: 225m² of A grade office space leased for 9 years
Rent: $156,025/year + gst
Agents: Luke Kershaw & Luke Frecklington

Attribution: Agency release.

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