Bayleys big $43 million auction

5:00 AM Saturday August 22, 2015 Colin Taylor

This property at 8-12 Clyde Road in Browns Bay town centre achieved the highest value at the auction of $5,212,000.

Twenty of 25 commercial and industrial properties put up for auction in Bayleys’ latest Total Property portfolio in Auckland have sold for over $43 million, one of the highest value auctions ever conducted by the agency.

John Church, national director commercial for Bayleys, says a feature of the auction was the strong bidding on larger properties, with seven of the properties selling for between $2,750,000 and $5,212,000.

“This in combination with a number of sales of close to $2 million helped push the total value to a record level for a commercial auction at this time of the year,” Church says..

“There was a big turnout for the start of the auction, as often is the case, but what was particularly noticeable about this one was the good number of investors who remained throughout the auction and the multiple bids we had on most of the offerings.

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The lowest yield of the auction of 4.3 per cent was realised for a shop which sold $3,190,000 in this St Heliers strip retail block.  

“This strong competition resulted in some very good prices being achieved across all value ranges with all but three of the investment sales being concluded within a four to six per cent yield band.. Tightening yields have continued to be a feature of the market this year driven by low interest rates and the depth of the underlying demand for commercial property. There are no signs of the current buoyant market easing up which means we are achieving some outstanding result for our vendors.”

The highest value property to sell was an 1100 sq m fully leased two level building, with ground floor retail and office above, on a prime 764 sq m corner site at 8-12 Clyde Road in the heart of Browns Bay’s town centre.

Rapid fire bidding from many bidders quickly pushed the starting price of $4.1 million up to $5,125,000 when it was declared on the market by auctioneer Richard Valintine. Two bidders - one of the tenants and a wealthy private investor - then fought it out until the hammer finally came down at $5,212,000 at a 5.1 per cent yield

The vendor of the property, which was sold by Ranjan Unka and Brian Caldwell of Bayleys North Shore Commercial, developed the site 36 years ago with two of the six tenants, Whitcoulls and a legal firm, having been in occupation since inception.

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The former and landmark Epsom Post Office at 311 Manukau Road, Epsom, sold for $3,025,000.

The lowest yield of the day of 4.3 per cent was achieved for a shop located in a strip retail block at 29 St Heliers Bay Road, St Heliers which was sold for $3,190,000 by Tony Chaudhary of Bayleys South Auckland.

Comprising a 198 sq m food mart and Lotto outlet plus 68 sq m of office and storage on a 301 sq m site, the property has a 12 year lease to Eden Foods from May 2007, with one six year right of renewal, and annual rent reviews to the Consumer Price Index plus two per cent.. Bids started at $2 million on the property which attracted multiple bidders before two were left competing to the end.

Chaudhary was involved in six of the auction sales at a total value of close to $12.5 million and a client of his was also the under bidder on the Browns Bay property.

“It was the strongest auction I have been involved in during eight years at Bayleys and I had a number of clients who bid on more than one property. Many of them had a Plan B if they missed out on their first preference – that’s a reflection of just how strong the market is at present.”

The sale of a childcare centre at 115 Boundary Road, Blockhouse Bay for $3,090,000 was also through Chaudhary. The purpose built centre occupied by the Magic Kingdom Childcare group and licensed for 60 children sold at a 5.5 per cent yield on a seven year lease from August 2015, with fixed annual rental increases of two per cent.

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Leased to a childcare centre in Blockhouse Bay, this property sold for $3,090,000. 

Chaudhary then teamed with colleague Dave Stanley of Bayleys South Auckland to sell a 2450 sq m warehouse and office building on a 4375 sq m site at 43 Ben Lomond Crescent, Pakuranga for $3,330,000 - a 6.5 per cent yield.

The property came with a new six year lease to pioneering New Zealand boat builder Rayglass, now part of multinational Brunswick Marine group, which has been in occupation in the building for 20 years.

Included in the auction was the former and landmark Epsom Post Office on a 789 sq m Mixed Use zoned corner siteat 311 Manukau Road, Epsom. It was sold for $3,025,000 at a 5.3 per cent yield through Mark Pittaway of Bayleys Auckland and Oscar Kuang of Bayleys International Division.

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NZ Opera occupies this warehouse and office building selling for sold for $2.8 million in Onehunga.

The fully leased two level 466 sq m building served as the local post office for over 80 years before refurbishing by the vendor into professional office suites and being earthquake strengthened to 100 per cent of the New Building Standard.

An 1845 sq m warehouse and office building on 3827 sq m at 107 Neilson Street, Onehunga sold for $2.8 million through Quinn Ngo, James Chan and Matt Lee of Bayleys International Division. It achieved a 4.7 per cent yield on its ground level lease to NZ Opera which uses the premises for rehearsals and stage set construction.

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A warehouse and office building in Pakuranga, leased to boat builder Rayglass, sold for $3,330,000. 

The lease has a final expiry of March 2017 and the 348 sq m first level office area is vacant. The property was declared on the market at $2,575,000 with additional bidding adding a further $225,000 to the final sale price.
Other properties to sell at the auction included:

  • At 6 Croftfield Lane, Wairau Valley, 2835 sq m of land leased as yard space until 2020 by an adjoining PlaceMakers store, was sold for $1,875,000 at 5.4 per cent yield through Owen Ding of Bayleys International and Laurie Burt of Bayleys North Shore Commercial.
  • A 799 sq m two level commercial building with two tenants on a 675 sq m site next to Hunters Plaza at 2 Sutton Crescent, Papatoetoe, sold for $1,250,000 at an 8.7 per cent yield through Nick Bayley, Geoff Wyatt and Tony Chaudhary, Bayleys South Auckland.
  • A 477 sq m refurbished building at 76 Victoria Street, Dargaville, leased to Westpac Bank until 2020 sold for $1,125,000 at a seven per cent yield through Ross Blomfield of Bayleys Whangarei and Tony Chaudhary.
  • A 307 sq m medium stud warehouse at 35A Normanby Road, Mt Eden, with a new six year lease to an electrical business sold for $884,000 at a 5.65 per cent yield through Stuart Bode of Bayleys Auckland.
  • A 189 sq m retail unit with two tenants at 185 Great South Road in Manurewa’s town centre sold for $620,000at a 7.6 per cent yield through Tony Chaudhary and Piyush Kumar of Bayleys South Auckland.
  • A two level building on an 868 sq m waterfront site at 20 The Esplanade, Whitianga,  sold with vacant possession for$1.9 million through Bev Calder and Sheree Henderson of Bayleys Coromandel. It comprises a 240 sq m ground floor restaurant and café licensed for 120 patrons plus a 270 sq m four bedroom apartment above.
  • A 1.2348 ha freehold industrial site, with existing older buildings and two licences to occupy over part of site providing holding income, at 355 West Coast Road, Glen Eden sold for $1.8 million through Mike Adams and Stuart Bode of Bayleys Auckland.
  • An historic 455 sq m 31 bedroom accommodation house plus two smaller cottages on an 1851 sq m site at 4 Alexis Avenue, Mount Albert, sold as a freehold going concern for $2,870,000 through Paul Dixon, Duncan Ritchie, Andrea Ritchie of Bayleys Auckland. The Kauri mansion Stoneleigh House dates back to the 1870s. 

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John Church (left), & Tony Chaudhary (right) of Bayleys.

Bayleys is currently sourcing properties for its next Total Property portfolio which closes on September 11.