"But in the medium term it offers an attractive investment holding with a low maintenance, solidly constructed building with a Grade A seismic assessment and a long standing tenant that is committed to the area.
"The lease also has annual fixed rental increases of 2 per cent providing built in rental growth."
A property in Papatoetoe with a Town Centre zoning, and a height allowance of 18m also attracted strong bidding. The 1459sq m site at 320 & 322 Great South Rd with a two-level 1040sq m fully leased commercial building, with four tenants, sold for $3,300,000 at a 3.6 per cent yield through Matt Lee and James Chan, of Bayleys International Division and Chaudhary, Bayleys South Auckland.
It was declared on the market at $2,500,000 and more than 80 further bids followed, including a number of $1000 increases, before it eventually sold to a neighbouring property owner.
Chan says an area of surplus land at the rear of the property, currently used for casual parking and on its own 595sq m title, added to development appeal.
Tenants include long-term occupants Li'lAbner Takeaways and the Village Foodmart on the ground floor, with a new five-year lease on the top floor to a night club.
The lowest yield of 2.37 per cent at the auctions was for a 517sq m industrial building on an under-developed 725sq m site at 6 Western Springs Rd, Kingsland, marketed by Scott Kirk and James Were of the Bayleys Auckland city & fringe team.
It has a Local Centre zoning with a 16m height limit. It is leased until the end of next year and sold for $2,925,000.
Another notable feature of the Auckland Total Property auction was the sale of all five offerings in The Grange, a new retail convenience centre located on State Highway 1 in Warkworth.
A childcare centre licensed for 80 children with 390sq m of indoor space and an outdoor play area of 442sq m, sold for $3,350,000 at a 5.2 per cent yield through Matt Lee and James Chan in conjunction with Jan Hutcheson, Bayleys Warkworth and Stephen Scott, Bayleys Auckland.
It has a new 20-year lease to Educare Group which has eight childcare facilities in Northland and is expanding into other parts of the North Island.
The lease has fixed annual 3 per cent rental increases, with a review to market after 10 years.
The other units to sell at The Grange were:
• A 62sq m unit, leased to Tank Juice for 10 years, with a five-year right of renewal, sold for $655,000 at a 5.5 per cent yield. The lease has fixed annual 3 per cent rental increases.
• A 48sq m unit leased to Noodle Noodle for 10 years, with a five-year right of renewal, sold for $475,000 at a 5.8 per cent yield. Its lease has fixed annual rental increases to the Consumer Price Index (CPI) plus 1 per cent
• A 59sq m unit leased to Kebabs on Queen for seven years, with a five-year right of renewal, sold for $580,000 at a 5.6 per cent yield. Its lease also has fixed annual rental increases to CPI plus 1 per cent
• A 389sq m unit leased to bulk retailer Floorwise for six years, with a six-year right of renewal, sold for $1,550,000 at 6.5 per cent yield. Its lease has fixed annual rental increases to CPI plus 1 per cent
Bayleys' North Shore office also had a strong day at the auction selling five of its offerings. Its largest sale was a fully leased two-level 905sq m commercial building at 231 Dairy Flat Highway, Albany, with 16 retail and office tenancies, which sold for $3,500,000 at a 7.2 per cent yield through Dean Gilbert-Smith, Eddie Zhong and Alex Strever. The building is on an 809sq m freehold site with a Local Centre zoning in the centre of Albany Village.
Bayleys North Shore Commercial agents also sold three investment properties at yields of less than 5 per cent:
• A 664sq m industrial building on a 1,105sq m Light Industry zoned site, with a new four-year lease to panel beater, sold for $2,025,000 at a 4.4 per cent yield though Simon Aldridge and Chris White. Approximately 330 sq m of undeveloped land is currently used for car parking.
• A 197sq m single-level retail building on a 306sq m high profile corner site at 157-159 Lake Rd, Belmont with a Local Centre zoning on the main arterial to and from Devonport sold for $1,400,000 at a 4.1 per cent yield through Simon Aldridge and Michael Nees. The anchor tenant is Belmont Liquor Centre with income also from a Thai takeaway and a Spark telecommunications tower.
• A 162 sq m industrial unit at 59-61 View Rd, Wairau Valley sold for $483,000 at a 4.8 per cent yield through James Kidd and Ashton Geissler. The tenant Goodstore NZ occupies multiple units in the block and has recently signed a new four-year lease.
In the northwest, a vacant 1743sq m freehold industrial site in 14-lot subdivision opposite Westgate Town Centre at 8 Kawakawa Place, Whenuapai sold for $862,000 at $495 per sq m through Grant Miller, Laurie Bell of Bayleys West Auckland division. Resource consent has been granted for a four unit development on this site.
There were also two substantial industrial sales in South Auckland at the auction. A 1540 sq m industrial building on a 3087 sq m site 11 Bolderwood Place, Wiri sold vacant for $3,235,000 through Nick Bayley and Karl Price. It has a 1070sq m warehouse with three gantry cranes, 140sq m canopy, 320 sq m of office plus a 150sq m mezzanine floor and a yard of approximately 660 sq m.
In Papakura, a 1442 sq m industrial building on a 6334 sq m corner site at 1 Croskery Rd sold for $2,510,000 at a 6.0 per cent yield through Mike Adams and Peter Migounoff. It has a 10-year head lease from May 2011 to a construction company.
