Shops are hot property at Auckland auctions

10:17 AM Saturday September 20, 2014 Colin Taylor

This high-profile corner property of six retail outlets at 66-88 Vincent St sold for $2.4 million.

Stand-alone retail properties have again led the market in sales at Bayleys’ latest Greater Auckland auctions held in the city last week.

Within the retail sector, foodservice, convenience, and grocery outlets were in hottest demand – with multiple bids on a range of suburban locations within the Greater Auckland isthmus.

John Church, Bayleys’ commercial and industrial director, said the day’s proceedings reflected the classic idiom of commercial property investment.

“Well built, modern, stock in good locations, with a strong or nationally-branded tenant in place on a solid lease all sold well. And retail is certainly flavor of the month among investors,” Church said.

“Conversely, B and C-grade stock in less desirable locations with shorter lease terms received fewer, if any, bids, as did larger retail units.”

Bidders showed a clear demarcation in their appetite though between individual units or small dual tenanted retail property holdings, and mid-sized blocks with multiple tenancies – particularly where those tenants were commercially orientated.

The auction programme started strongly with 10 of the first 11 land and building properties on the run sheet all selling under the hammer. Headlining the day was a block of six retail tenancies on a high-profile corner location at 66-88 Vincent Street, Howick. The 571 sq m building on 660 sq m of land returned a combined annual income of $121,749 plus GST and sold for $2.4 million at a yield of 5.06 per cent.

The tenancy spread incorporates a dairy/Lotto shop, florist, café, butchery, pharmacy, hair salon and doctor’s studio. The listing was marketed by Shane Snijder and Tony Chaudhary of Bayleys Manukau.

The demand for retail premises in the auction room continued over to North Shore listings, where both units up for auction at the Wairau Junction retail hub sold under the hammer.

A 98 sq m unit with fast food outlets Nando’s and Pita Pit as tenants and returning an annual income of $73,000 sold for $1.05 million at a yield of 6.95 percent. Nearby in the same hub, the 330 square metre Produce Planet food and grocery mini-market building returning $85,000 in annual rental sold for $1.26 million at a yield of 6.74 percent.

True Commercial - Nandos and Pita Pita at Wairau Junction retail hub.jpg

A unit in the Wairau Junction retail hub housing fast food outlets Nando’s and Pita Pit sold for $1.05 million. 

The Wairau junction portfolio was jointly marketed by James Chan and Matt Lee of Bayleys Central Auckland, and Damian Stephen of Bayleys North Shore.

The trend continued gaining momentum through the sale of a retail unit in Epsom, where a high profile 228 sq m property, Unit F at 395 Manukau Rd, with a Bottle O liquor store as the sole tenant returning annual income of $55,825 plus GST, was sold for $768,000. The property was marketed by Mark Pittaway of Bayleys Central Auckland and delivered a yield of 7.26 per cent.

A Mad Butcher outlet in Triangle Road, Massey, returning $96,080 per annum plus GST was passed in at a top bid of $1.050 million but sold hours later through post-auction negotiations. The 527 sq m building and four car parks is leased to the Mad Butcher chain until 2016 and was marketed by Damien Bullick of Bayleys Central Auckland.

While single and dual tenancy retail offerings in Wairau Road sold after strong bidding, a bigger retail block just a short distance away in Archers Road reflected the market’s appetite for stand-alone strata-title units.

The 774 square metre retail premises on 2030 square metres of land in Archers Rod contains a Japanese food outlet, Jetts Fitness branded gymnasium, a bridal wear shop, and pet food retailer. The property was passed in after an opening vendor bid of $3million.

And just a few hundred metres away in the opposite direction, a substantial 1680 sq m building with a variety of independent tenants returning an annual income of $187,775 plus GST was passed in after an opening vendor bid of $2.250 million.

This front portion of the building is occupied by bedroom furnishing retailer Bedstop, with six smaller retail and office spaces of between 22 – 103 sq m tenanted by a range of service and consultancy businesses.

A similar property in the heart of the South Auckland rural township of Tuakau mirrored those urban results. The 1615 sq m structure housing six independent tenancies and generating a total of $89,980 plus GST of rental income per annum was passed in at $917,500.

True Commercial - Produce Planet Wairau Junction.jpg

Also in the Wairau Junction retail hub, this building housing a Produce Planet food and grocery mini-market building sold for $1.26 million. 

Location and building age were sited as “bidder reluctance issues” when it came to a Mad Butcher retail outlet in Triangle Road, Massey, which was passed in at $1.050 million.

Elsewhere in the sectors covered in the Greater Auckland auction, the land and buildings housing an ANZ branch in Great South Road, Papatoetoe, and returning $140,483 plus GST per annum, sold for $2.255 million. The property was marketed by Nick Bayley and Ben Bayley of the Bayleys Manukau office for a yield of 6.22 per cent

ANZ has just signed a new six year lease on the location, with two further three year rights of renewal. The building has a seismic assessment of 80 per cent of New Building Standard (NBS).

Substantiating the demand for location-based properties, a 134 sq m home and work building with commercial use rights in Jervois Rd, Ponsonby, sold for $830,000. The vacant rustic barn style property clad in corrugated iron has a half share of 511 sq m of land, and was sold by James Were and Scott Kirk of Bayleys Central Auckland.

Meanwhile, a vacant 645 sq m commercial premises with some high stud warehousing space in Archers Road, Glenfield, sold for $1.130million. The property – which requires modernising and refurbishing – was marketed by Trevor Duffin and Alex Strever of Bayleys North Shore.

Two industrial class properties sold under the hammer. A 1913 sq  m group of buildings on 1606 sq m of land in Dominion Rd, Mount Roskill, sold for $2.47 million at a yield of 4.53 per cent after marketing by Mike Adams and William Coates of Bayleys Central Auckland.

One of the tenants is a sheet metal firm with a light industry manufacturing operation.

Further south land and buildings housing two automotive panel beating and paint businesses in Great South Road, Manurewa, sold for $871,000 for a yield of 6.93 per cent. The two tenancies within the 490 sq m building on 1467 sq m of land – enabling some 30 cars to be parked – generates a net rental return of $60,375 per annum and were marketed by Peter Migounoff and Shane Snijder of Bayleys Manukau.

True Commercial - Unit F, 395 Manukau Road, Epsom.jpg

Unit F at 395 Manukau Rd, with a Bottle O liquor store as the sole tenant, sold for $768,000.