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Kiwi Property sells Majestic to Investec fund

Kiwi Property Group Ltd has secured an agreement to sell the Majestic Centre in Wellington for $123.2 million to Investec Property Ltd, as the responsible entity for the Investec Australia Property Fund.

As part of the sale arrangement, Investec will appoint Kiwi Property to manage the office tower, which has undergone one of New Zealand’s largest seismic upgrades. It’s Investec’s first New Zealand purchase.

Kiwi Property chief executive Chris Gudgeon said yesterday: “We are immensely proud of what we have achieved for the tenants of the Majestic Centre, raising the seismic performance rating of the office tower to 100% of new building standard.

“Notwithstanding, the Majestic Centre was identified for sale as part of our capital recycling programme. Proceeds from the sale, which is due to settle in December, will be used to pay down bank debt, providing further flexibility for Kiwi Property to invest in line with our strategy.”

In the company’s annual accounts to March 2017, the value of the 21-storey Majestic Centre increased to $119.4 million, but a net value loss of $5 million was recorded after allowing for capex on the seismic upgrade programme completed in January. The building, at 100 Willis St, has a net lettable area of 24,469m² (2322m² retail, 22147m² office) & 240 parking spaces and typical floorplates of 1000m².

Kiwi Property is due to release its result for the September half-year next Monday, 20 November. At the moment it’s showing the Majestic Centre has 92.1% occupancy, a weighted average lease term of 6.8 years & net rental income of $7.1 million.

The buyer, Investec, said it was acquiring the property on an initial yield of 7.1% and with average annual contractual rental escalations of about 2.75%. It said the property was 98% occupied and had a long weighted average lease expiry of 6.6 years.

Investec is a South African investment bank which has a dual listing in Johannesburg & London. It floated the Investec Australia Property Fund on the Johannesburg Stock Exchange in 2013, launching with an $A130 million portfolio of 8 industrial & office properties.

That portfolio now comprises 25 properties worth $A942 million, and fund chief executive Graeme Katz said yesterday that was a scale at which management believed an ASX listing could be considered.

He added: “We continue to believe in the case for investing in good quality investment properties in Australia & New Zealand. The fund’s current equity yield of 8.2% is attractive for South African investors, especially as it is underpinned by the region’s favourable macro-economic conditions, property yield spread over historically low funding costs locked in and income returns in hard currency.”

Link:
14 November 2017: IAPF portfolio value approaches $A1.0bn mark through acquisition & value uplift

Attribution: Kiwi & Investec releases.

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6 sales & 5 leases

Bayleys agents on the Shore have sold 5 commercial properties outside the auctionroom, from Stanmore Bay on the Whangaparaoa Peninsula through to Kelston in the west, and have also leased 5 properties, all on the Shore.

One other sale listed below is a post-auction transaction in Mt Eden.

Sales

Isthmus west

Mt Eden

54 Mt Eden Rd:
Features: 400m² site zoned mixed use, in Grammar zone, 130m² villa, garage + 3 parking spaces
Outcome: passed in at $1.4 million, sold at that figure post-auction
Agents: Alan Haydock, Phil Haydock & Damien Bullick

North-east

Albany

6-8 Omega St, unit 8:
Features: 181m² office unit – office 165m², other area 16m², 5 parking spaces
Outcome: sold in October for $620,000 + gst
Agents: Alex Strever & Ildy Meixner

Stanmore Bay

676 Whangaparaoa Rd:
Features: 261m2 mixed-use 2-level building on a half share of 1104m2 site, . Ground floor copy centre tenant renewed in January for 3 years at $26,300/year net, 3-bedroom apartment above with sea views has a rental appraisal of $27,000/year
Outcome: sold for $830,000
Agents: Mustan Bagasra & Dylan Turner

Takapuna

Sentinel, 3-9 Northcroft St, unit R1:
Features: 85m² retail unit, 6 parking spaces
Rent: $31,750/year net + gst
Outcome: sold in October for $665,000/year net + gst at 4.8% yield
Agents: Terry Kim, David Han & Mustan Bagasra

Wairau Valley

18A Ashfield Rd:
Features: 120m² industrial unit, 2 parking spaces
Rent: $25,800/year net + gst       
Outcome: sold to NZ Longevity Foundation Ltd in October for $475,000 + gst at 5.43% yield, $3958/m² land & building
Agent: James Yu

North-west

Kelston

31 Cartwright Rd, unit B:
Features: 53m2 industrial unit, 4.7m stud warehouse, mezzanine office & storage, new roof, 3 parking spaces
Outcome: sold vacant for $350,000
Agent: Simon Davies

Leases

North-east

Browns Bay

14 Clyde Rd:
Features: 764m² retail property – retail 590m², office 174m², 6 parking spaces
Rent: leased in October for $180,000/year net + gst
Agents: Anna Radkevich & Ranjan Unka

Devonport

57-59 Victoria Rd, office 2:
Features: 12m² office
Rent: leased in October at $9000/year net + gst, premises rental $750/m²
Agents: Chris White

Rosedale

59 Apollo Drive, ground floor right, unit G1:
Features: 155m² office, 4 parking spaces
Rent: leased in July for $43,150/year net + gst, including parking at $20/space/week, net excluding parking $38,990/year, premises rental $252/m²       
Agents: Alex Strever & Laurie Burt

39 Arrenway Drive, unit B3:
Features: 203m² industrial unit
Rent: leased in October for $37,000/year net + gst, premises rental $182/m²
Agents: Laurie Burt

Wairau Valley

89 Ellice Rd, unit 4D:
Features: 125m² industrial unit, 2 parking spaces
Rent: leased in October for $32,000/year net + gst
Agents: Dean Gilbert-Smith, Adam Curtis & Adam Watton

Attribution: Agency releases.

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Dozen sales for JLL

JLL agents have sold 11 commercial properties around Auckland and one in Palmerston North.

CBD

Learning Quarter

44E Anzac Avenue:
Features: 168m² office floor with apartment conversion potential, 2 parking spaces
Rent: $35,280/year net
Outcome: sold for $580,000 at a 6% yield
Agent: Jason Armstrong

Isthmus east

Epsom

Knights Inn, 234 Green Lane West:
Features: 26-unit motel
Outcome: sold for $9.5 million
Buyer’s agents: Jason Armstrong & Jarred Hill

Isthmus west

Blockhouse Bay

552-554 Blockhouse Bay Rd:
Features: 2 shops of 50m² & 53m², leased to a hair salon & a Thai food takeaway
Rent: $44,240/year net + gst
Outcome: sold for $911,000 at a 4.85% yield
Agent: Kevin Reardon

Grey Lynn

27 Nixon St:
Features: 455m² 2-level building, residential over ground-floor warehouse
Outcome: sold vacant for $2.2 million
Agents: Jason Armstrong & Alex Wefers

30a Pollen St:
Features: 377m² industrial unit – 306m² ground-floor warehouse, 70m² office & amenities, 4 parking spaces
Rent: $68,000/year net + gst
Outcome: sold for $1.365 million at a 4.98% yield
Agents: Alex Wefers & Jarred Hill

60A Surrey Crescent:
Features: 147m² industrial unit, 4 parking spaces
Rent: $37,000/year net + gst
Outcome: sold for $728,000 at a 5.08% yield
Agents: Alex Wefers & Jarred Hill

Mt Albert

43a Linwood Avenue, unit 7:
Features: 260m² vacant warehouse unit, 6 parking spaces
Outcome: sold for $750,000 at a 5.2% yield on market rent
Agent: Alex Wefers

Mt Eden

45A Normanby Rd:
Features: 582m² industrial unit – 385m² warehouse, 197m² office & amenities, 10 parking spaces
Outcome: sold vacant for $2.058 million
Agent: Ben Jamieson

23 Edwin St, unit G02:
Features: 105m² office unit, 4 parking spaces, new 3-year lease
Rent: $50,000/year net + gst
Outcome: sold for $1.05 million at a 4.76% yield
Agent: Ben Jamieson

North-east

Mairangi Bay

17-19 Apollo Drive:
Features: vacant 13,008m² zoned general business
Outcome: sold on behalf of AUT, price confidential
Agents: Jason Armstrong & Dave Mayhew

41 Centorian Drive:
Features: 20,172m² of subdivisible residential land zoned mixed suburban, longtime home of medical publisher Adis International Ltd (more recently Springer Science+Business Media)
Outcome: sold, price confidential
Agents: Jason Armstrong & Dave Mayhew

South of the Bombays

Manawatu

Palmerston North

10-15 The Square:
Features: 1830m² of office & retail space
Outcome: sold, price confidential
Agent: Jason Armstrong

Attribution: Agency release.

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5 sales by Colliers

Colliers agents have sold a Victoria Park Market restaurant and a Rosedale office in Auckland. In the South Island, the agency has offices in Christchurch & Dunedin and a quake-damaged motel in Christchurch.

CBD

Victoria Quarter

Victoria Park Market, Drake St, unit 74:
Features: 268m² net lettable area, New York-style restaurant & bar, the Oak Room, on 6.5-year lease
Rent: $100,794/year + gst     
Outcome: sold for $1.3 million at a 7.8% yield
Agents: Adam White, Simon Felton, Gareth Fraser & Tony Allsop

North-east

Rosedale

9C William Pickering Drive:
Features: 377m² 2-level office     
Outcome: sold by private investor to owner-occupier Zen Connections Ltd for $1.395 million
Agents: Janet Marshall & Kerry Cook

South Island

Christchurch

Merivale

49 Papanui Rd:
Features: quake-damaged former Adelphi motel, 1517m² site, 12 motel units & a manager’s unit
Outcome: sold at auction for $1.7 million on an “as is, where is” basis
Agents: Will Franks & Mark Macauley

Rolleston

7 Tennyson St:
Features: 2781m² site, 261m² retail, new 10-year lease to Restaurant Brands Ltd
Rent: $170,000/year net + gst     
Outcome: sold at auction for $3.215 million + gst at a 5.3% yield
Agents: Courtney Doig & Charlie Oscroft

Dunedin

ASB House, 248 Cumberland St, levels 1 & 2:
Outcome: sold for $2.825 million at a 7.6% yield
Agent: Dean Collins

Attribution: Agency release.

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New Lynn corner property sells

A commercial property in New Lynn was sold under the hammer, a Parnell apartment was passed in and a Herne Bay property with rezoned potential was withdrawn from auction at Bayleys’ auctions around Auckland last week.

Apartments

Isthmus east

Parnell

6 Brighton Rd, unit 11:
Features: one-bedroom apartment, study nook
Outgoings: rates $1687/year including gst
Outcome: passed in
Agents: Chris Reeves & Fleur Denning

Commercial

Isthmus west

Herne Bay

185 Jervois Rd:
Features: 508m² site zoned terraced housing & apartment buildings, 154m² floor area,  medical-related tenant
Rent: $75,000/year net + gst
Outcome: withdrawn from auction
Agents: Scott Kirk & James Were

North-west

New Lynn

1 Crum Avenue:
Features: 607m² corner site zoned business light industry, 360m² building, 2 retail & industrial tenancies
Rent: $46,000/year from 2 tenancies
Outcome: sold for $1.305 million at a 3.5% yield
Agents: Mike Adams & Simon Davies

Attribution: Agency release.

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Summerset buys more land for Christchurch village

Retirement village developer & operator Summerset Group Holdings Ltd has bought an extra 2.1ha next to its Casebrook village in Christchurch.

Chief executive Julian Cook said yesterday the land on Cavendish Rd would provide for an additional 71 villas: “We are seeing strong enquiry for our Casebrook village, which is currently under construction, with the first homes available to move into in March next year.”

On completion, Summerset on Cavendish will now offer over 340 homes, including 2- & 3- bedroom villas and serviced apartments. It will also provide rest-home & hospital-level care and the company’s first memory care centre in Christchurch. This concept provides for people with dementia to have their own one-bedroom apartment complete, with living space & bathroom, in a secure environment.

“We were the first aged-care operator in New Zealand to launch this style of apartment living for those with dementia. Our first memory care centre opened in Levin last November. These centres provide residents with the dignity & respect of having their own home within a secure centre, purpose-designed for their needs.”

Attribution: Company release.

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Precinct launches bond issue

Precinct Properties NZ Ltd launched its $100 million bond issue today – up to $75 million of secured unsubordinated fixed-rate 7-year bonds, with the ability to accept $25 million more – to institutional & New Zealand retail investors. There’s no public pool.

The indicative margin range above the 7-year swap rate is 1.5-1.6%/year, subject to a minimum interest rate of 4.4%/year. The margin & interest rate will be set on Friday 17 November following a bookbuild process.

Link: Indicative terms sheet

Earlier story:
10 November 2017: Precinct expects to open bond offer next week

Attribution: Company release.

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Updated: PFI $100 million bond issue fully subscribed

Published 2 November 2017, updated 12 November 2017:
Property for Industry Ltd confirmed its $100 million 7-year bond issue on 2 November. On 10 November, the interest rate was set at 4.59%/year, reflecting a margin of 1.65%/year above the 7-year swap rate.

PFI offered $75 million of senior secured fixed rate bonds to institutional & New Zealand retail investors and $25 million in oversubscriptions, and it was fully subscribed. There was no public pool. The company will use the proceeds to repay existing bank debt.

PFI expects the offer to open next Monday, 13 November, and to close on Friday 24 November. The indicative margin range above the 7-year swap rate for the bonds was 1.65-1.8%/year, subject to a minimum interest rate of 4.55%/year. The margin & interest rate were set following a bookbuild process on Friday 10 November.

Link: PFI bond offer product disclosure statement, terms sheet & presentation

Earlier stories:
1 November 2017: PFI settles portfolio purchase
6 October 2017: PFI uses new credit facility & rights issue to buy low-site-coverage freight portfolio

Attribution: Company release.

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PFI gets 79% takeup for rights offer

NZX listed industrial property landlord Property for Industry Ltd said on Thursday 78.7% of the new shares available under its 1:10 pro rata renounceable rights offer were taken up.

The 35.7 million new shares represent gross proceeds of $54.9 million. The new shares not taken up under the rights offer will be allotted to the underwriter, Forsyth Barr Group Ltd.

New shares will be allotted & begin trading on Tuesday 7 November.

Earlier stories:
2 November 2017: PFI launches $100 million bond issue
1 November 2017: PFI settles portfolio purchase
6 October 2017: PFI uses new credit facility & rights issue to buy low-site-coverage freight portfolio

Attribution: Company release.

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Updated: Vincent St & First Imperial apartments sell

Published 8 November 2017, updated 12 November 2017:
A large unit in the converted former Beca building on Vincent St and a studio in the First Imperial on Hobson St sold under the hammer at City Sales’ auction of central city apartments today. The other 4 apartments on the auction list were passed in, 2 without a bid and one with an indicative bid for the vendor.

A CityZone unit has since been sold, price not disclosed.

CBD

Learning Quarter

The Quadrant, 10 Waterloo Quadrant, unit 913:
Features: 32m², one bedroom, deck
Outgoings: rates $1185/year including gst; body corp levy $3577/year
Income assessment: $440-460/week
Outcome: no bid
Agents: Maryanne Wong & Tina Bartlett

Uptown

Updated: CityZone, 11 Liverpool St, unit 1808:
Features: 48m², 2 bedrooms, deck, parking space
Outgoings: rates $1396/year including gst for unit, $130/year including gst for parking; body corp levy $4392/year for unit, $781/year for parking
Income assessment: $450/week current
Outcome: passed in at $400,000, sold Thursday, price not disclosed
Agent: Iona Rodrigues

132 Vincent St, unit GH:
Features: 100m² internal, 13m² deck, 3 bedrooms, 2 bathrooms, tandem parking
Outgoings: rates $3194/year including gst for unit + parking; body corp levy $8977/year for unit + parking
Income assessment: $850-900/week
Outcome: sold for $1.13 million
Agent: Susan Frear

Victoria Quarter

First Imperial, 125A Hobson St, unit 1A:
Features: 32m², studio
Outgoings: rates $994/year including gst; body corp levy $2492/year
Outcome: sold for $210,000
Agent: Tanya Rotherham

Sugartree Centro, 145-147 Nelson St, unit 903:
Features: 52m² internal, 5m² balcony, one bedroom + flexi
Outgoings: rates $423/year including gst; body corp levy $2916/year
Income assessment: $530-550/week unfurnished, $580/week furnished
Outcome: sole bid from vendor at $450,000, passed in
Agents: Tina Bartlett & Anna Birkenhead

Waterfront

Viaduct Point, 125 Customs St West, unit 316:
Features: leasehold, 101m², 2 bedrooms, 2 bathrooms, 2 decks, parking space
Outgoings: rates $2279/year including gst; body corp levy $18,064/year including ground rent $9349/year
Outcome: no bid
Agents: Gabrielle Hoffmann & Nicola Hunt

Attribution: Auction.

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