Auction clearance rates have reached an all-time high this year for the Bayleys North Shore Commercial team.
Sixteen out of 18 Shore commercial and industrial properties so far put up for auction in 2018 by Bayleys North Shore agents have sold either before, at or after auction – giving a very high 89% clearance rate.
Bayleys’ commercial auctioneer Richard Valintine says the North Shore team has consistently achieved the highest success rates from Bayleys’ eight national Total Property portfolio auctions a year. A variety of properties are pooled for sale at the auctions providing different vendors with a cost-effective and targeted way of accessing buyers.
“North Shore properties are keenly sought after and strongly competed for by investors and owner occupiers and this is enabling our agents to get some great results for their vendors through the auction method of sale,” Richard Valintine says.
He says the number of properties being auctioned this year is down on last year and buyers have also found it harder to obtain bank funding to be able to bid unconditionally.
“However, despite these challenges, auctions are still achieving higher clearance rates than other methods of sale. A lot of buyers prefer the transparency of the auction process because they know exactly where their competition is and how much they are willing to pay.
“We are having to work a bit harder to get some offerings across the line but at the end of the day that’s what a real estate agency is there for.”
Attracting the strongest bidding competition from Bayleys’ latest Total Property portfolio was a small unit opposite the anchor Tai Ping supermarket tenancy in the Rosedale Retail Centre at 2/94 Rosedale Road in Albany. It sold for $890,000 at a 4.22% yield through Eddie Zhong, Steven Liu and Meng He.
The auction of the 73m² shop, with just under 13 months to run on its lease to a health supplements and souvenir retailer, was brought forward a week after the vendor accepted a pre-auction offer of $750,000. This became the declared reserve under Bayleys’ well-established auction protocol which provides all interested parties with an opportunity to compete for the property. Strong bidding from six potential buyers then pushed the final sale price up a further $140,000 before the hammer finally came down.
Other North Shore properties to sell at Bayleys’ last two Total Property auctions were:
Unit 7A, 21 Corinthian Drive, Albany: 87m² corner premises in the 16-unit Orchard Park Retail Hub sold for $1.15 million at a 4.78% yield through Meng He, Steven Liu and Eddie Zhong. A 10-year lease to the Double Happy Chinese restaurant commenced in September 2017.
Unit 8, 215 Rosedale Road, Albany: 208m² of retail, mezzanine office and warehouse/storage space plus four excusive car parks in Rosedale Plaza sold for $850,000 at a 5.29% yield. The unit has a five-year lease from September 2016 to West Shell, a specialist fishing equipment and apparel retailer and was sold by Adam Curtis, Damian Stephen and Adam Watton.
Unit E, 65-71 Porana Road, Wairau Valley: A 133m² retail unit was sold for $1.025 million at a 5.36% yield by Adam Curtis, Damian Stephen and Steven Liu. It has a new six-year lease to a Hollywood Bakery franchisee.
Unit 7, 162 -178 Wairau Road, Wairau Valley: A 45m² unit at the rear of Wairau Junction retail complex sold for $550,000 at a 5.56% yield through Ranjan Unka and Andrew Lin. It has a four-year lease to Persia Kebabs from July 2017.
Unit D, 18 Ashfield Road, Wairau Valley: An industrial unit comprising a 110m² ground floor and 30m² storage/mezzanine area, with a month-by-month tenancy, sold for $440,000 at $4000/m² through Trevor Duffin, James Yu and Matt Mimmack.
Richard Valintine says there's a common misconception that auctions are only suited to smaller properties. “We have concluded a number of $5 million-plus auction sales this year at similar yields to lower value transactions which is a reflection of the strong demand that there is for a limited supply of larger, quality properties.”
The highest price achieved on a Shore property under the hammer this year was $5.38 million for a 1,458m² industrial building on a 2,457m² corner site at 9 Tawa Drive, Albany which was sold at a 4.55% yield by Matt Mimmack and Laurie Burt. It was constructed in 1994 for multinational tenant Xylem Water Solutions which has been in occupation ever since and renewed for a further four years in April. The property generated over 100 enquiries and there were 12 bidders at the auction.
Selling post auction for $7.4 million, at a 5.61% yield, earlier in the year through Brian Caldwell was a two-level commercial building on an 817m² Metropolitan Centre zoned site at 8-12 The Promenade which was initially passed in at $6.5 million.
Selling recently after also being passed in at auction earlier in the year was a 1,205m² industrial unit plus 13 car parks at 234 Archers Road, Wairau Valley which sold with vacant possession for $2.95 million through Ranjan Unka and Matt Mimmack.
Bayleys North Shore Commercial is currently sourcing properties for its first Auckland Total Property auction for 2019 which will be held on March 6.
The industrial sector remains the commercial and industrial property market’s star performer.
2018 is shaping up as another strong year for the North Shore commercial property market led by a continuing climb in industrial property activity.
In the first six months of its current financial year from April 1- September 30, 2018, Bayleys North Shore Commercial concluded 43 industrial leases up from 37 in the same period last year. The total amount of space leased was 17,696m², a 13% increase on the previous April-September.
That offset more subdued office and retail leasing markets, with the retail sector in particular being constrained by a lack of new development activity.
Buoyant tenant and owner occupier demand is continuing to keep industrial vacancy rates at very low levels on the Shore, sitting at just 2.1% across Albany’s main industrial precincts.
New benchmark rentals for recently completed developments are helping to pull rentals up across the general industrial market which in combination with very low yields has continued to push property prices up.
The value of unconditional sales negotiated by Bayleys North Shore Commercial agents between April 1 and September 30 across all sectors of the market was in excess of $150 million and up 8.5% from the same six months last year.
A larger number of medium sized property sales has contributed to this increase. Recent Bayleys North Shore sales in this segment of the market include:
368 Beach Road, Mairangi Bay: a 644m² fully leased commercial building on an 836m² corner site in centre of the village sold for $4.175 million at a 4.9% yield through Michael Nees and Dean Gilbert-Smith with a resource consent for a four-level retail and apartment building. The property currently has four ground floor retail tenants with a legal firm office tenancy on the upper level.
Unit A, 10 Orbit Drive, Albany: 1,097m² industrial premises occupied by Cellnet Ltd sold for $3.375 million at a 4.74%
yield through Matt Mimmack and Laurie Burt. It comprises an 838m² warehouse with 40m² canopy, 258m² of offices plus 15 parking spaces.
1 Shea Terrace, Takapuna: a 660m² two-level office building on a 1,012m² Mixed Use zoned site adjacent to North Shore Hospital sold partly occupied for $3.55 million through Michael Nees, Damian Stephen, Adam Curtis and Adam Watton. The top floor, occupied by Waitemata District Health Board, is returning $102,620pa with the 330m² ground floor tenancy recently vacated.
3A Burns Avenue, Takapuna: a 727m² site on the fringe of the central business area with 110m² office premises in a converted house was sold vacant for $2.9 million by Damian Stephen, Alex Strever and Michael Nees.
Highgate Business Park, Silverdale: A fully serviced 5,246m² development site zoned Light Industry sold for $2.623 million at $500/m² through Matt Mimmack and Rosemary Wakeman. Two adjoining fully serviced lots totalling 4,593m² were also sold by Rosemary Wakeman for $2.5 million at $544/m².
Bayleys North Shore Commercial
Devereux Howe-Smith Realty Limited, Bayleys, Licensed under the REA Act 2008
D +64 9 489 0999 | F +64 9 489 0990
29 Northcroft Street, Takapuna, Auckland 0622