"The buyer was a high net worth residential property investor who was looking for high-quality commercial assets and came to us through our colleague at Ray White City Apartments," says Ingham.
"This is a strong trend which we expect to continue this year. Many buyers are becoming disillusioned with the highly regulated residential market, where capital growth has flattened and returns have been eroded to a level where they can't compete with commercial yields."
Commercial property offers many attractive drawcards for investors including superior returns; net leases where the tenant is responsible for certain outgoings such as insurance and rates; and longer lease terms, Ingham says.
"There are several characteristics of commercial property investments which are providing strong impetus for those looking for passive holdings and income to buy commercial property."
The ASB building offered several highly desirable fundamentals including strong income and tenant covenant; a high-quality, modern building; and a busy location on an arterial route in a high-growth precinct. These were all strong drawcards for prospective buyers, Davies says.
Given the trend for residential investors to diversify into commercial property, it has become much more common for agencies to offer cross-sector services, says Ingham.
"We launched our commercial business at the beginning of 2018 and from the outset worked closely alongside Ray White's residential sales experts. This was a cornerstone part of our strategic direction. It enables us to greatly expand the buyer pool we can present to owners of commercial property, with the increasing interest in this category among residential investors."
The partnership was formalised during 2018, with Ray White City Realty (owned by Phil and Daniel Horrobin) becoming a shareholder in Ray White Commercial Auckland alongside the three founding owners and directors.
"It made good sense for us to leverage the company's strong existing networks and connections in the residential market while growing the new commercial operation," says Daniel Horrobin. "This enables us to provide a valuable additional service to all our clients that addresses a clear gap in the market."
The increasing popularity of mixed-use property, especially under the Unitary Plan, further demonstrates how the line between the commercial and residential property markets is becoming blurred, says Ingham.
"This is in large part due to the progressive intensification of central city land use under the Unitary Plan, which is changing the face of the property market as the use of central city land becomes more intensive."
Several properties Ray White Commercial and Ray White residential agents took to the market last year, including a warehouse & apartment in Grey Lynn and a Ponsonby mixed-use property, were sold following very strong buyer inquiry and multiple offers to purchase, Davies says.
"These sales were classic examples of how desirable mixed-use property is in the current market. We had hundreds of parties through the properties and multiple buyers submitted offers," Davies says.
"There is a tremendously high level of buyer interest in mixed-use property, whether it be an owner-occupied, live-work situation or a loft-styledresidence with commercial premises attached which can be leased out for business use, providing a valuable income stream."
