Mixed bag nets $16 million at auction

5:00 AM Saturday October 3, 2015 Colin Taylor

The highest price achieved at the auction was $2,735,000 for this office building at 4-8 Pavilion Drive, Airport Oaks.

A mix of retail outlets, development sites and vacant buildings were among 11 properties that have sold for close to $16 million at the Bayleys’ latest Greater Auckland auction held last week.  

Two Mixed Use zoned properties with future development potential attracted particularly strong bidding with both selling for well above their reserve prices.

There were 10 bidders on a 354 sq m Mixed Use zoned freehold site at 7 Eden St, Newmarket, marketed by Andre Siegert and Brendan Graves of Bayleys Auckland which sold for $2.6 million, equating to a land value of $7344 per square metre. The property was declared on the market at $2,250,000 by auctioneer Richard Valintine and a series of further mostly $25,000 bids from multiple parties pushed it up to its final sale price.

“There is a very basic 1960s’ vacant 413 sq m warehouse and mezzanine office building on the property which the new owner intends to lease up in the short term with a view to developing  the site longer term,’’ says Siegert . “The property’s real value lay in the location and the land and its flexible Mixed Use zoning. The site also has an increased 24.5m height allowance under the Proposed Auckland Unitary Plan (PAUP) which will provide additional opportunities and options for the new owner.”

There was similarly strong interest in a prime 879 sq m corner site at 38 Taharoto Rd, Takapuna, also with development potential under its PAUP Mixed Use zoning and with the added benefit of being located in a Special Housing Area. It was declared on the market at $1.6 million with four bidders adding another $470,000 to the price before it eventually sold for $2,070,000 through Stephen Scott, Bayleys Auckland and Ranjan Unka, Bayleys North Shore Commercial.

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A two level character building occupied by a florist at 571 Remuera Rd sold for $830,000. 

“It’s a bottom drawer, land banking investment until 2021 because longstanding tenant North Shore Veterinary Clinic has just exercised a final six year right of renewal on its lease,” says Scott. “But the strong location on a major arterial road in a growth area meant that bidders were confident that the underlying land value would continue to increase over that time.”

The veterinary clinic occupies a 142 sq m converted 1950s’ brick residential dwelling on the property and is paying an annual rental of $50,100 plus outgoings which meant the property sold at a very low income yield of 2.4 per cent.

The next lowest yield of the day was 3.8 per cent achieved on a property at 571 Remuera Rd, Remuera which sold for $830,000 through Cameron Melhuish of Bayleys Auckland and Tony Chaudhary of Bayleys South Auckland. The 138 sq m two level 1920s’ character building with ground level retail and a two bedroom apartment above on a 157 sq m site has been occupied since 2009 by a florist which renewed the lease for a further two years in August.

“The property has unused surplus land at the rear and there is the potential for the next owner to increase the income and add value to the property,” says Chaudhary. The land is zoned Business Neighbourhood Centre under the PAUP which allows for buildings of up to three storeys high with residential use on upper floors.

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A retail unit occupied by a Thai restaurant in the Highland Park shopping centre attracted strong bidding before it sold for $491,000

The highest price achieved at the auction was $2,735,000 for a 764 sq m office building at 4-8 Pavilion Drive, Airport Oaks, marketed by Marty Roestenburg of Bayleys South Auckland. One of four in same complex constructed in 2008, it has an A-grade seismic rating. Coming with 31 car parks and three tenancies, it sold at a 7.4 per cent yield.

Two retail properties were offered for sale with declared reserves which meant their vendors had received offers prior to the auction which they were prepared to accept.

A 144 sq m pizza outlet, part of a modern 10 unit retail complex developed in the early 2000s at 597 Great South Rd, Manukau, sold for $1,060,000 at a 5 per cent yield through Chaudhary and Bayleys South Auckland colleagues Janak Darji and Amy Weng.. Bidding on this property started at the declared reserve of $964,000. It has a 10 year lease to Sal’s Pizza from February 2015, plus one 10-year right of renewal, with fixed annual rental increases of 3.5 per cent.

A 200 sq m medical centre in the Royal Oak Mall sold for $542,000 through Matt Lee, Oscar Kuang and James Chan, Bayleys Auckland. Bidding started at its reserve of $450,000 and the property received a further 40 bids before it eventually sold for $542,000 at a 13.5 per cent yield. The medical centre has been in occupation for over 20 years and has a current three year lease from January 2015 and one further three year right of renewal.

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This basic 1960s’ vacant warehouse and mezzanine office building at 7 Eden St, Newmarket sold for $2.6 million. 

A 100 sq m retail unit marketed by Kuang and Chan in the Highland Park shopping centre and occupied by a Thai restaurantattracted some of the strongest bidding at the auction before it sold for $491,000 at an 8.5 per cent yield on its three year lease from June 2013. It was declared on the market at $450,000 and 23 further bids followed, many of them $1000 increases, before the hammer finally came down. 

Two vacant retail buildings also sold under the hammer at the auction. A large format 748 sq m retail building with potential to create smaller tenancies at 14 Clyde Road, Browns Bay sold with vacant possession for $2,570,000 through Unka and Brian Caldwell of Bayleys North Shore Commercial. It is located on a 764 sq m site in the town centre next door to a fully tenanted two level building at 8-12 Clyde Rd which Unka and Caldwell also sold under the hammer in August for $5,212,000 at a 5.1 per cent yield.

A 250 sq m retail building, marketed by Chaudhary and Sunil Bhana of Bayleys Auckland, on a 156 sq m site at 16 Uxbridge Rd in the heart of Howick’s commercial precinct also sold with vacant possession for $800,000.

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A 200 sq m medical centre in the Royal Oak Mall sold for $542,000.

Selling post auction was avacant 918 sq m warehouse and office building on a 1012 sq m Business 9 site at 11 Ashfield Rd, Wairau Valley. It sold the day after the auction for $1,460,000 through Unka and Adam Watton of Bayleys North Shore Commercial after being passed in at $1,375,000.

At 202 Great South Rd in Manurewa’s town centre, a semi vacant, 500 sq m two level commercial building on a 430 sq m site was sold under the hammer for $745,000 by Kuang and Chan. It has a three year ground floor lease from October 2013 to a licensed bar with nine gaming machines producing net annual rental income of $40,956, with the upstairs office space being empty.

Outside of the auction room, Lee and Chan were involved in the sale of another Greater Auckland property, a cafe in the Zone 23 complex in Edwin Street for $1,050,000 at 6.4 per cent yield. The Gala Cafe has a new six year lease over 217 sq m of ground floor retail space plus five car parks, with one six-year right of renewal. 

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At 8-12 Clyde Rd, Browns Bay this fully tenanted two level building sold under the hammer for $5,212,000.