Hammer runs hot at city sale

30A Ben Lomond Crescent, which is home to two playing courts for indoor cricket and netball, went for $805,000. Photo / Supplied

Sub-$1m sector especially strong, writes Colin Taylor

Bayleys Real Estate has achieved its biggest ever auction sale of an industrial land-holding, with a 6.2ha site in Penrose selling under the hammer for $6.6 million.

The Business Activity 4-zoned bare land at 60 Leon Leicester, which had been on the market for some time, was the highlight sale of the auction and attracted intense bidding from two Auckland developers at Bayleys' Greater Auckland portfolio auction. It was pronounced on the market at $6.5 million, with multiple bids of $10,000 increments and then $5000 increases before it was eventually sold at $106 per sq m.

The property, which was marketed by Mike Houlker, James Hill and David Gubb, of Bayleys Auckland, comprises predominantly flat, undeveloped land. It was formerly part of a quarry, with earthworks to fill the site completed in 2006. Resource consent had been obtained by the vendor for subdivision into seven industrial lots ranging from 5280sq m to 1.0147ha.

Hill says the Business 4 zoning, designed for industrial locations which also abut residential areas, permits a wide range of medium-intensity, light industrial and commercial uses. "Vacant business sites of this size in central Auckland are rare and particularly in an established industrial location such as Penrose," Hill says. "This one has significant development upside."

It was one of 13 industrial and retail properties to sell either under the hammer or prior to the Greater Auckland auction at a total value of more than $16 million. "We had a clearance rate of over 70 per cent for the auction, which was a pleasing result for our Auckland commercial and industrial sales team," says Richard Valintine, Bayleys' senior commercial auctioneer.

Chris Bayley, Bayleys general manager commercial and industrial, said a mix of tenanted investment and vacant and semi-vacant properties sold, with the big land sale being an obvious highlight. "Most of the other sales were under $1 million, which reinforces yet again just how strong that sector of the market is, with demand from buyers outstripping supply," Bayley says.

One of the vacant properties to sell was a 1010sq m industrial complex at 11 Mountjoy Place, Onehunga, built in the 1970s on a 1304sq m site. It was sold prior to auction by Hill and Lisa Nielson, of Bayleys Auckland, for $830,000. The building has 719sq m of clearspan warehousing with a 7m stud, 184sq m of office, showroom and amenities space over two levels, 107sq m of mezzanine storage, plus a secure yard area.

Nielson was involved in another vacant sale prior to auction - a two-level commercial building at 15 Graham St, in central Auckland's Victoria Quarter precinct. She and Mike Adams, of Bayleys Auckland, sold the 322sq m premium character office space for $1,250,000. The property is part of a complex of three buildings of a similar size and style and has a third share of 1045sq m of land.

A variety of retail properties also attracted strong interest. A 627sq m building on a 329sq m site at 205-207 Great South Rd, Papakura, with the recently completed Papakura Library and museum on one side and the ANZ Bank on the other, sold after spirited bidding for $955,000 at a 7.9 per cent yield through Cameron Melhuish and Alan Haydock, of Bayleys Auckland, partnered by Shane Snijder, of Bayleys Manukau. Anchor tenant Urban Pharmacy has been in occupation since the building was constructed in 1968. The property was declared on the market at $900,000 and two parties fought it out with $5000 bid increases. Also selling in nearby O'Shannessey St in Papakura was the Salvation Army Family Store, which went under the hammer for $725,000 at an 8 per cent yield and was marketed by Dave Stanley of Bayleys Manukau and Mike Ashton of Bayleys Counties. The Salvation Army has been a long-standing tenant in the 348sq m building on a 460sq m site and recently renewed its lease for another three years.

Further north, a 512sq m two-level unit at 53 Cavendish Drive, Manukau, with three separate tenancies returning $25,000 per annum each, sold for $845,000 at an 8.9 per cent yield through Tony Chaudhary of Bayleys' Manukau office. The unit has a liquor store and a pre-packed food preparation tenancy on the ground floor, with an Indian restaurant above. Chaudhary also sold a 100sq m Pizza Hutt outlet in the Highland Park Shopping Centre in Pakuranga for $530,000, at a 7.5 per cent yield. Long-standing tenant Restaurant Brands Properties exercised a three-year right of renewal in 2010 and has further rights of renewal until 2021.

Also selling under the hammer in Pakuranga was a 935sq m warehouse at 30A Ben Lomond Cres, which is home to two indoor cricket and netball courts and has been tenanted by Action Indoor Sports Stadium for 14 years. It went for $805,000 at a 9.9 per cent yield through Snijder and John Bolton and Katie Wu of Bayleys Manukau. In central Auckland, a 90sq m unit among a variety of retail premises on the ground floor of the Quest apartment building in Short St, Newmarket, was sold for $600,000 at a 7.6 per cent yield by Henry Thompson, Stuart Bode and Clint Barber, of Bayleys Auckland. The unit is occupied by Heizo Japanese restaurant on a lease to March 2017.

At 879-881 Mt Eden Rd, Mt Eden, two retail shops with accommodation at the rear, on a 539sq m site, sold for $800,000 at a 7.4 per cent yield. Encompassing 280sq m of buildings dating to the 1920s, the property was sold prior to auction by Nicolas Ching of Bayleys Auckland.

A 400sq m character building on a 347sq m site at 185 Onehunga Mall, Onehunga, was sold for $950,000 at an 8.2 per cent yield by Scott Kirk and Cameron Melhuish, of Bayleys Auckland, in conjunction with Tony Chaudhary, of Bayleys Manukau. It has two ground-floor retail tenants, Urban Clothing and Roast Dinners, plus an office tenancy upstairs.

In West Auckland, a 200sq m retail outlet occupied by The Homes Essential store at 3029 Great North Rd, New Lynn, sold prior to auction through Ching and James Chan, of Bayleys Auckland. Part of a four-unit complex opposite Lynmall, it went for $900,000 at a 9 per cent yield with a six-year lease in place from July 2008.