Auctions prove value in tough market
This property at 188-192 Hinemoa St, Birkenhead, sold for $2,535,000. Photo / Supplied
A total of 20 properties offered at Bayleys’ latest Total Property commercial auctions around the North Island have so far sold at a total value of $34.4m.
Bayleys’ national director commercial John Church says auctions are proving the most effective method of sale in the more challenging market that has emerged this year, with 75 per cent of Auckland offerings sold on or before their auction day.
“A lower level of commercial sales activity has been evident in the first half of this year due to a significant shift in credit lending criteria across all major banks. More comprehensive due diligence requirements have led to a marked drop off in ‘off market’ transactions, in particular.
“However, we have maintained an excellent clearance rate in our commercial auction rooms across the country and good quality, competitively priced property is still highly sought after. The big advantage auctions provide in the current more uncertain market is that potential purchasers have to be in a position to bid unconditionally.”
Twelve properties were sold out of 16 offerings across two weeks of auctioning in Auckland.
Three restaurant buildings, formerly part of the Masala chain of Indian restaurants and put for auction on behalf of the Official Assignee, attracted very strong bidding and sold for a total of $7,875,000.
Bayleys North Shore Commercial’s John Algie, who managed the sales process, says the offerings comprised a well maintained converted character residential premises, with a mix of indoor and covered outdoor dining, positioned in high profile locations. Favourable land zonings under the new Unitary Plan provide potential for future development
The first of the three to be auctioned, a two-level building on a 554sq m Mixed Use zoned site at 510 Mt Eden Rd on the corner with Disraeli St sold for $3,610,000. The 200sq m Indian Lounge restaurant is at street level with a further 206 sq m downstairs which could lend itself to future uses including residential.
A two-level building at 510 Mt Eden Rd St sold for $3,610,000. Photo / Supplied
At 188-192 Hinemoa St, Birkenhead, the Chutney Mary Fusion Indian restaurant on an 835sq m site with a Town Centre zoning sold for $2,535,000. There is a vacant office area below the restaurant previously used as accommodation.
The third restaurant to sell under the hammer was a 276sq m dwelling trading as the Paprika restaurant on a 1783 sq m residential site at 195 Brightside Rd, Stanmore Bay. Overlooking Stanmore Bay, one block away from the beach, it attracted the most bids of the three offerings. It was announced to be “on the market” by auctioneer Richard Valintine after only 11 bids at $1,415,000. Close to 50 further bids followed before it eventually sold for $1,730,000.
A 1281sq m older style industrial building in a strong location on a 2043sq m site at 9 Olive Rd, Penrose also attracted big bidding before selling with vacant possession for $3,320,000 at $2591.7 per sq m land and building through John Bolton and Roy Rudolph of Bayleys’ industrial team.
“It was the first time the property had been on market in 34 yearsand it attracted multiple bidders,” says Rudolph. “We had two intending occupiers very keen to own it and this resulted in a premium price.”
The property at 195 Brightside Rd overlooking Stanmore Bay, sold for $1,415,000. Photo / Supplied
Two properties with future development potential sold for yields of less than 4 per cent.
A 300sq m site at 481 Parnell Rd, Parnell, with a Mixed Use zoning and in the double Grammar zone, with a 225sq m two-level character dwelling converted for commercial use, sold for $2,450,000, through Alan Haydock, Damien Bullick and Phil Haydock of Bayleys Auckland City and Fringe team. The property has a resource consent to demolish but sold at a 3.26 per cent yield on its four-year lease to Mt Hobson Properties Ltd from May 2017.
In Milford, a 688sq m site with Neighbourhood Centre zoning at 47 Nile Rd and a mix of retail and residential buildings sold for $1,560,000 at a 3.6 per cent yield through Eddie Zhong, Terry Kim and Ranjan Unka, Bayleys North Shore Commercial. It has two road front shops, a superette and Thai takeaway totalling 132sq m and a 92sq m residential dwelling occupied by superette tenant.
Bidding started slowly until it was announced to be on the market at $1,350,000 with several new bidders pushing the price up $210,000.
At 47 Nile Rd a mix of retail and residential buildings sold for $1,560,000. Photo / Supplied
Other properties to sell at the Auckland auctions included:
- A 61 sq m unit in The Grange retail complex in Warkworth sold for $432,000 at a 4.93 per cent yield through Matt Lee and James Chan of Bayleys International division. The auction was brought forward after the vendor received an acceptable offer which then became the declared reserve of $338,500. A further 44 bids increased the final sale price by almost another $100,000. Leased as office space to Hawthorn Geddes Engineers & Architects for six years from April 2017, the unit has potential for conversion to retail at a later stage.
- A 169 sq m workshop and office unit at 4 Titan Place, Silverdale marketed by Rosemary Wakeman, Bayleys North Shore Commercial and Mustan Bagasra, Bayleys Orewa sold for $426,000 at a 5.28 per cent yield on a two-year lease to Ice Industrial Engravers from July 1, 2017. Built in 2007, the tilt slab concrete unit came with air conditioning, a security alarm system and two car parks.
- An 180sq m retail unit in the rear portion of Wairau Junction convenience centre at 170 Wairau Rd, sold for $840,000 at a 6.61 per cent yield through Matt Mimmack and Ashton Geissler, Bayleys North Shore Commercial. It is occupied by Wairau Foods & Spices which renewed in February for a further six years.
- A 292sq m corner unit in a block of 13 shops at 5 Oates Rd, Glen Eden sold for $1,375,000 at a 6.69 per cent yield through Adam Curtis and Adam Watton, Bayleys North Shore Commercial and Piyush Kumar, Bayleys South Auckland. It is occupied by a Mad Butcher store on a 10-year lease expiring in October 2018
- A 2025 sq m bulk retail building on a 2141sq m site at 232 Great South Rd, Manurewa, sold for $2.4m at a 7.08 per cent yield back through Shane Snijder and Piyush Kumar, Bayleys South Auckland. It has been owned and occupied by a family furniture business for the past 20 years which has taken a two-year leaseback.
- An 809sq m corner site at 32 Elliot St, Papakura, with a two-level main building and 1920s’ bungalow at rear with two commercial and one residential tenancies sold for $1,320,000 at a 5.3 per cent yield through Rod Grieve and Peter Migounoff, Bayleys South Auckland.
John Church, Bayleys