Archive | Sectors

City loft & Onehunga section sell

A city loft and an Onehunga property zoned for intensification sold at Bayleys’ residential auctions last week.

CBD

Queen St

QVB Building, 6 Victoria St East, unit 6B:
Features: 2-level loft, mezzanine bedroom
Outcome: sold for $511,000
Agents: Julie Quinton & Wendy Nichols

Uptown

Highgate Towers, 8 Howe St, unit 3A:
Features: 2 bedrooms, 2 bathrooms, 2 balconies, 2 parking spaces
Outcome: passed in
Agents: Julie Quinton, Trent Quinton & Ellis Prince

Isthmus east

Onehunga

53 Spring St:
Features: 989m² site, 4-bedroom villa in terraced house & apartment buildings zone
Outcome: sold for $1.95 million
Agent: John Procter

Parnell

258 Parnell Rd, unit 43:
Features: studio, parking space
Outcome: auction postponed
Agent: Trisha Vincent

Isthmus west

Avondale

76 Riversdale Rd, unit 4:
Features: one-bedroom unit, carport
Outcome: up for sale by mortgagee, withdrawn from auction
Agents: Cherry Killgour & Steve Leyland

South

Manurewa

2 Totara Rd:
Features: 1042m² section, 3-bedroom house, basement garage, resource consent approved for 3-lot subdivision
Outcome: passed in, back on market at $799,000
Agents: Vanessa Nash, Ginny Cheyne & Stefni Baigent

Attribution: Auction documents.

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2 old suburban centre retail strips sell

Streetfront retail properties in New Lynn & Papatoetoe – both redevelopment prospects – sold under the hammer at Colliers’ auction today.

North-west

New Lynn

3114-3120 Great North Rd (pictured above):
Features: 486m² site zoned business – metropolitan centre, 307m² single-level strip retail building, 18m street frontage, 4 tenants, 3 leases expire in 2021, 2023 & 2025 with no renewal right, rear parking
Rent: $85,240/year net + gst
Outcome: sold for $1.3 million + gst
Agents: Gareth Fraser, James Appleby & Josh Coburn

South

Papatoetoe

74 St George St, Papatoetoe (outlined).

74 St George St:
Features: 1174m² site zoned business – city centre, allowing for development up to 27m high, 368.5m², land at rear used as shared parking, building fully tenanted
Rent: $101,641/year net + gst
Outcome: sold for $1.95 million + gst
Agents: Gareth Fraser & Matthew Barnes

Attribution: Auction documents.

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Fair value turnaround disguises similarity of Goodman half-year earnings as trust sets up new development pipeline

A turnaround in fair value gains lifted the Goodman Property Trust’s half-year profit 47% above the interim result a year earlier.

The trust made $66.4 million pretax ($45.3 million a year earlier) in the September half, including $16.8 million in fair value gains on certain investment properties.

In the September 2017 half, the trust had a fair value loss of $8.4 million, principally from a $12.7 million deduction in land value (no change this time) & $5.4 million deduction for stabilised properties (also no change this time). The difference was a $25.2 million turnaround for September 2018.

The valuation effect contributed heavily to the 50.1% after-tax profit rise to $59.3 million ($39.5 million in 2017), but in terms of adjusted operating earnings the 2 years were very similar – up 0.5% this year to $60.1 million ($59.8 million) pretax, up 0.6% to $51.7 million ($51.4 million) after tax, in both years representing 4c/unit.

Cash earnings/unit rose 2.3% to 3.61c (3.53c). Cash earnings is a non-GAAP financial measure that assesses free cashflow/unit after adjusting for borrowing costs capitalised to land and expenditure related to building maintenance.

The big change this time round that will have a strong bearing on future performance is the reduction in debt, from $836 million representing a 32.4% loan:value ratio, to $406 million, representing a ratio of only 17.5%.

The trust had strong operating results – portfolio occupancy 98.4% & a weighted average lease term of 5.5 years.

It also had $210 million of development work in progress, and expects to start another $75-100 million of new projects this financial year. Committed gearing will still be only 25.8%.

The chair of trust manager Goodman (NZ) Ltd, Keith Smith, said in announcing the result last week: “The focus on Auckland industrial property [now 99% of the portfolio] is contributing to strong financial results and positioning the trust for sustainable growth over the long term.”

Chief executive John Dakin said underlying economic drivers remained strong and customer demand for high quality industrial property continued to exceed supply.

Goodman has $210 million of development projects scheduled for completion over the next 8 months, with over 50% lease commitment, expected to rise to 70% as deals already well progressed are concluded.

Mr Dakin said the low gearing would give the trust greater financial flexibility. The priority is to reinvest, completing development of the trust’s remaining 22ha of landholdings.

In addition, Goodman wants to replenish its development pipeline with acquisitions that offer longer-term opportunity through intensification of use or redevelopment, starting with its $93 million purchase of the Foodstuffs distribution centre at Roma Rd in Mt Roskill, located at the northern end of State Highway 20 near the Waterview Tunnel.

“The population within a 20-minute delivery truck radius is estimated to be almost 700,000 people. With warehouse space already supply constrained, the surrounding consumer catchment makes this an ideal location for fulfilment & logistics companies.”

Links:
Interim report
Investor briefing presentation

Attribution: Company release.

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Sale St redevelopment sells

A redeveloped building on Sale St (pictured), above Victoria Park, and 2 development properties at Greenlane & in Papakura are the leading sales in Colliers’ latest transactions list.

CBD

Kitchener St

2 Kitchener St, unit 1:
Features: 1026m² retail unit, 3 tenancies
Rent: $223,500/year net + gst
Outcome: sold for $3.5 million + gst at a 6.39% yield
Agents: Adam White, Simon Felton & Gawan Bakshi

Victoria Quarter

Hobson Towers, 26 Hobson St, level 6:
Features: 325m² office floor, 14 parking spaces
Outcome: sold with vacant possession for $2.03 million + gst
Agents: Tony Allsop, Simon Child & Roger Seavill

34 Sale St:
Features: 6317m² redevelopment, 4 office floors, 2 parking levels
Outcome: sold for $63 million + gst at “a yield in the early 5%s”
Agents: Simon Child, Sam Gallaugher & Matt Lamb

Isthmus east

Greenlane

614 & 616 Great South Rd, Greenlane.

614 & 616 Great South Rd:
Features: 3867m² commercial property, net lettable area 2125m² in 2 buildings
Outcome: sold for $11.6 million at a 3.1% yield on holding income
Agents: Gareth Fraser, Simon Child, Josh Coburn & Colliers’ capital markets team

South

Papakura

40-44 East St, lot 2:
Features: vacant 1507m² corner site formerly occupied by the New World Papakura carpark
Outcome: sold for $1.54 million + gst
Agents: Chris Wakim & Matthew Barnes

South of the Bombays

Wellington

Petone

140 Hutt Rd:
Features: 1160m² site, 1020m² warehouse, showroom & office, 10 parking spaces
Outcome: sold with vacant possession for $2.475 million + gst
Agents: Kieran Lennon (Colliers) in joint agency with Gollins Commercial

Taita

1115 High St:
Features: 4818m² development site
Outcome: sold with vacant possession for $1.95 million + gst, with quotes in place for the removal of 1170m² of various structures
Agents: Tim Julian & Janette Lillas

Attribution: Agency release.

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Mairangi Bay sale heads Shore transactions

Bayleys commercial agents on the North Shore have sold a fully tenanted Mairangi Bay site (pictured) which has consent for apartment development, and a Rosedale industrial unit, and have signed 5 leases around the Shore and one for a Karangahape Rd shop.

Sales

North-east

Mairangi Bay

368 Beach Rd:
Features: 836m² site, 644.77m² mixed use building, 6 tenancies, local centre-zoned site has conent for an apartment development
Rent: $210,314/year net + gst
Outcome: sold in October for $4.175 million + gst at $4994/m² land, 4.9% yield with current small vacancy, 5% fully tenanted
Agents: Michael Nees & Dean Gilbert-Smith

Rosedale

BizPark North Shore, 63 Arrenway Drive, unit 2:
Features: 118m² industrial unit – office 50m², warehouse 68m², 2 parking spaces
Outcome: sold vacant in November for $585,000 + gst
Agent: Ian Waddams

Leases

CBD

Uptown

258 Karangahape Rd, shop B:
Features: 130m² shop – retail 110m², warehouse 20m²
Rent: leased in November for $45,000/year net + gst, premises rental $346/m²
Agent: Terry Kim

North-east

Rosedale
156 Bush Rd, unit B:
Features: 229.4m² industrial unit – office 122.9m², warehouse 69.6m², other area 37.4m², 4 parking spaces
Rent: leased in November for $39,000/year net + gst
Agent: James Kidd

23 Canaveral Drive, unit B:
Features: 513m² industrial unit – retail 184.5m², warehouse 300m², other area 28.5m², 8 parking spaces
Rent: leased in November for $87,000/year net + gst
Agent: Matt Mimmack

12 Parkhead Place, unit B:
Features: 545m² industrial unit – warehouse 412m², office 133m², 12 parking spaces
Rent: leased in November for $107,000/year net + gst
Agents: Laurie Burt & Matt Mimmack

Sunnynook

20 Tonkin Drive, shop 2:
Features: 56m² shop
Rent: leased in November for $16,000/year net + gst, premises rental $286/m²
Agent: Dev Choudhury

Wairau Valley

18 Link Drive, unit C:
Features: 500m² retail unit – retail 350m², mezzanine 50m², other area 100m²
Rent: leased in November for $130,000/year net + gst, premises rental $260/m²
Agent: Trevor Duffin

Attribution: Agency release.

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PMG looks to add 2 properties to unlisted Pacific fund

Tauranga-based syndicator Property Managers Group opened an offer yesterday seeking $37.44 million to buy 2 industrial properties in Hamilton & Palmerston North.

They’ll be added to the portfolio of PMG’s diversified, unlisted commercial property fund, Pacific Property Fund Ltd.

It’s the 6th & largest capital-raising for Pacific Property since it was founded in 2013.

The company aims to raise the new investor capital by 7 December to buy 33 Vickery St in Hamilton, tenanted by Alto Packaging Ltd, price $35,478,636; and 31 El Prado Drive in Palmerston North, which is online retailer EziBuy Ltd’s international distribution centre, price $16.55 million.

Including acquisition costs, PMG puts the total cost of the 2 transactions at $59.55 million. Assuming the capital-raising is fully supported, Pacific Property will require $22.11 million of loans from ASB Bank & the Bank of NZ for a 37.1% debt ratio.

Pacific Property is offering investors 36 million shares at $1.04/share and is targeting a gross cash distribution return (net of expenses but before tax) of 7.25c/share for the full financial year to 31 March 2020.

PMG chief executive Scott McKenzie said the acquisitions were in line with Pacific Property’s strategy for ongoing growth & diversification and PMG’s continued confidence in the solidly performing commercial property sector.

“Unlisted commercial property funds have been one of the best performing asset classes in the last 3-5 years compared to 6-month term deposits (3.25%), residential property returns (4.3%) & NZX 50 gross yields (5.2%) over the past 12 months,” Mr McKenzie said.

Completion of these 2 purchases will take Pacific Property’s portfolio to 12, valued at a total $183 million, with 76 tenants on a weighted average lease term of 6.4 years.

Link:
Property Managers Group

Attribution: Company release, product disclosure statement.

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Fed holds rate

The US Federal Reserve kept the target range for the federal funds rate at 2-2.25% today, and gave no indication when it might next change the rate.

Fed chair Jerome Powell said in his summary of the state of the market:

“Information received since the Federal open market committee met in September indicates that the labour market has continued to strengthen and that economic activity has been rising at a strong rate.

“Job gains have been strong, on average, in recent months, and the unemployment rate has declined. Household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier in the year. On a 12-month basis, both overall inflation & inflation for items other than food & energy remain near 2%. Indicators of longer-term inflation expectations are little changed, on balance.

“Consistent with its statutory mandate, the committee seeks to foster maximum employment & price stability. The committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labour market conditions and inflation near the committee’s symmetric 2% objective over the medium term. Risks to the economic outlook appear roughly balanced.

“In view of realised & expected labour market conditions & inflation, the committee decided to maintain the target range for the federal funds rate at 2-2.25%.

“In determining the timing & size of future adjustments to the target range for the federal funds rate, the committee will assess realised & expected economic conditions relative to its maximum employment objective & its symmetric 2% inflation objective. This assessment will take into account a wide range of information, including measures of labour market conditions, indicators of inflation pressures & inflation expectations, and readings on financial & international developments.”

Attribution: Bank release.

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Reserve Bank expects to hold cashrate long-term, though numerous factors could change that

The Reserve Bank kept the official cashrate at 1.75% yesterday, and governor Adrian Orr said: “We expect to keep the rate at this level through 2019 & into 2020.”

This is his summary:

“There are both upside & downside risks to our growth & inflation projections. As always, the timing & direction of any future official cashrate move remains data dependent.

“The pick-up in gdp growth in the June quarter was partly due to temporary factors, and business surveys continue to suggest growth will be soft in the near term. Employment is around its maximum sustainable level. However, core consumer price inflation remains below our 2% target midpoint, necessitating continued supportive monetary policy.

“GDP growth is expected to pick up over 2019. Monetary stimulus & population growth underpin household spending & business investment. Government spending on infrastructure & housing also supports domestic demand. The level of the $NZ exchange rate will support export earnings.

“As capacity pressures build, core consumer price inflation is expected to rise to around the midpoint of our target range at 2%.

“Downside risks to the growth outlook remain. Weak business sentiment could weigh on growth for longer. Trade tensions remain in some major economies, raising the risk that trade barriers increase and undermine global growth.

“Upside risks to the inflation outlook also exist. Higher fuel prices are boosting near-term headline inflation. We will look through this volatility as appropriate. Our projection assumes firms have limited pass-through of higher costs into generalised consumer prices, and that longer-term inflation expectations remain anchored at our target.

“We will keep the official cashrate at an expansionary level for a considerable period to contribute to maximising sustainable employment, and maintaining low & stable inflation.”

Links:
Monetary policy statement
Press conference live-stream

Attribution: Bank release.

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Kauri export opponents get partial win in Supreme Court

The Northland Environmental Protection Society has won one ground of appeal to the Supreme Court on the export of kauri products, but has failed to get a declaration from the court on exports of swamp kauri.

The court issued its judgment today.

The declarations sought relating to the operation of the Forests Act included a declaration that light surface carvings or decoration don’t meet the definition of finished or manufactured indigenous product and a declaration that the Ministry for Primary Industries had acted unreasonably in approving exports of swamp kauri.

The majority held that, to be lawfully exported, an item must be a product in itself and in its final or kitset form.

The court majority concluded, on the Forests Act appeal: “We have differed in a number of major respects from the Court of Appeal’s interpretation of the definition of finished or manufactured indigenous timber product. This means that the appeal on this point must be allowed.”

The court held that the Protected Objects Act doesn’t cover swamp kauri as a category, and dismissed that appeal.

However, the court majority suggested that, given swamp kauri is a finite resource and the threat to living trees from kauri dieback disease, “a review of the legislative framework with regard to swamp kauri may be desirable”.

Justice Willie Young reached the same conclusions but provided separate reasoning, primarily around certification. Since 2004, no mandatory certification process applied to exports of finished or manufactured indigenous timber product.

Justice Susan Glazebrook wrote the majority decision. The other judges on the bench were Justices Mark O’Regan, Ellen France & Terry Arnold.

Link:
Supreme Court kauri export decision

Attribution: Judgment.

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2 sales & 6 leases by Commercial Realty

Commercial Realty Ltd agents have completed 2 sales & 6 leases with values over $50,000 in the last 3 months.

Sales

Isthmus east

Penrose

1016a Great South Rd:
Features: 882m² industrial unit
Outcome: sold for $2.775 million to a nearby owner-occupier
Agents: David Turner & Danny Guise

South

East Tamaki

325 Ti Rakau Drive, unit 5:
Features: 180m² industrial unit, 2 levels, 3 parking spaces
Outcome: sold for $550,000 to an air-conditioning company as owner-occupier
Agents: David Turner & Brad Rathbun

Leases

Isthmus east

Penrose

16 Olive Rd:
Features: 988m² industrial premises, leased to a quickly expanding national tenant
Rent: $110,000/year net + gst
Agents: Willie Fernandes & Danny Guise

North-west

Swanson

212 Swanson Rd, units 1 & 2:
Features: 990m², long-term lease
Rent: $71,000/year net + gst
Agent: Daniel Speck

South

Drury

4 Creek St:
Features: 630m², warehouse plus yard area
Rent: $105,000/year net + gst
Agents: Mark Bramwell & Brad Rathbun

East Tamaki

1E Lady Ruby Drive:
Features: 460m² warehouse & office unit, road frontage
Rent: $65,000/year net + gst
Agent: David Turner

Takanini

12 Marphona Crescent, unit 1:
Features: 365m² industrial unit with road frontage, leased to an overseas company
Rent: $60,000/year net + gst
Agent: Brad Rathbun & David Turner

12 Marphona Crescent, unit 2:
Features: 360m² industrial unit, leased to an international tenant before development completion
Rent: $55,000/year net + gst
Agent: Danny Guise

Attribution: Agency release.

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