The character building at 243 Hinemoa St, Birkenhead was the first commercial property established in the area over 100 years ago. Photo / Supplied
The character building at 243 Hinemoa St, Birkenhead was the first commercial property established in the area over 100 years ago. Photo / Supplied
NAI Harcourts has released its third and final Key Assets commercial property portfolio for 2017, including a positive market commentary from around the country.
The Auckland commercial property market is in good health as it heads towards the end of the year although yields for investors are still sitting at around 5 per cent, says Rob Meister of NAI Harcourts North Shore Commercial.
"Low vacancy levels are benefiting landlords in terms of rent, and the overall shortage of property, particularly industrial space, is keeping prices higher and yields lower," he says. "The 5 per cent yield is the general market result."
His colleague Andrew Bruce says properties that have 'not ticked all the boxes' do not achieve this yield.
"The side effect is many investors are looking outside of Auckland for higher yields - including Whangarei where yields are sitting in the 7-9 per cent range."
Peter Peeters, of NAI Harcourts Whangarei says his region is experiencing huge interest in industrial properties for lease, but they are almost impossible to find. "More than 160ha of industrial greenfields land at Marsden Point has been snapped up in recent months by companies moving in to Whangarei from other parts of the country." Peeters says.
Mike Neale, in the agency's Hamilton Commercial office, says the Te Rapa Gateway Industrial Park is shaping up to become a major Waikato hub for heavier transport, logistics and transport-support industries. "A significant number of transport-related companies are gathering in the 120ha park including big players like Mainfreight and NZ Post. Particularly distribution and logistics firms see it as an accessible location and the Waikato region offering affordable lifestyles for staff."
The Wade Hotel renovated hotel at 2 Tavern St, Silverdale, was constructed in 1881. Photo / Supplied
Wellington is experiencing low vacancies for prime office space, says Tony Kidd, general manager for NAI Harcourts. "This low supply is creating a strong demand for new buildings to be delivered to the market. Some key projects, such as Site 9 on the waterfront, Sir Bob Jones' 'timber tower' in Featherston St and 20 Customhouse Quay are all in the pipeline, which should begin to alleviate the supply issue in the not-too-distant future."
In the South Island, Ben Murphy of NAI Harcourts Christchurch City Commercial, says Christchurch has hit some significant milestones in its rebuild, particularly in the CBD with the completion of major projects like the BNZ centre and the ANZ centre; along with opening of The Crossing retail development.
"The significant amount of new office development that's come to market in recent months has kept rentals down as tenants are able to pick and choose," Murphy says. "However, that supply imbalance should start to settle down as the rate of new builds slows.
"There are few new office developments due for completion in the next 12 months, which will see vacancy rates reduce as demand catches up with supply," he says.
Properties newly listed in the latest Key Assets portfolio include:
An historic, freehold 19th century building in central Whangarei at 84-88 Bank St which is being marketed for sale by Peter and Cheryl Peeters of NAI Harcourts Whangarei. Listed with the Historic Places Trust as a Type 2 building, it is Whangarei's only stone building in a town where wood was traditionally used for construction.
The building backs onto Butter Factory Lane at the rear and formerly housed a butter factory, furniture factory and a bakery with some of the old drive shafts and pulleys still visible. Built on the edge of a lava flow rock base, the second level has a lava flow wall on one side and stone wall on the other.
This historic 19th century building is for sale in central Whangarei at 84-88 Bank St. Photo / Supplied
Cheryl Peeters says the stone was quarried directly from the site and is used for the bottom two storeys of the four-level building. The building, with a total floor area of 1300sq m on an 820sq m site, has completed a seismic upgrade and is now home to nine retail, cafe, restaurant, office and service company tenancies. It generates $179,000 plus GST per annum - including $40,000 available on a lease back arrangement from the vendor.
Further south another landmark property at 243 Hinemoa St, Birkenhead, is for sale by negotiation through Isaac Tankard and Nick Young of NAI Harcourts North Shore.
Tankard says the two-level character building at 243 Hinemoa St, was the first commercial property established in the area over 100 years ago. "It's now on the market for the first time in over 25 years."
With a ground floor area of 218sq m and a first floor of 77sq m on a freehold 412sq m site, the building is leased to Kettawa Thai Limited paying total rent of $72,000 per annum plus GST with the lease to the restaurant covering both the ground floor and the first floor. In addition, a billboard positioned on the south-eastern side of the building provides another source of income.
Young says the property is in the heart of Birkenhead with views across the harbour to the Auckland CBD and is opposite the newly built library and near Highbury Mall. "It has a Town Centre Zoning that allows for a building height of 21m and rental growth upside," he says.
"With a strong tenant covenant and future add-value potential, character buildings like this are a rarity in this tightly-held market," Young says.
Back up north, a restored historic tavern with a long lease to the operators is being marketed for sale in the Silverdale industrial estate by Geoff Thorne and Rene Geertshuis, also of the agency's North Shore Commercial branch. Fittingly located at 2 Tavern Rd, the Wade Hotel is for sale for an asking price of $4,350,000 plus GST (if any).
Thorne says the hotel, constructed in 1881, is one the oldest buildings on the Hibiscus Coast and has benefited from a number of recent extensions and upgrades. "A two-level restaurant, bar and hotel building, with heritage-styled timber floors and walls, allows for a high number of occupants with covered tables and chairs also surrounding the building," he says.
An artist's concept of the high-stud warehouse at 520 Arthur Porter Drive, in the Te Rapa Gateway industrial park. Photo / Supplied
The restaurant and bar have a floor area of 570sq m and generate an annual income of $150,000 plus GST and operating expenses, from a 12-year lease to the business operators with six 6-year rights of renewal.
Geertshuis says the building has been split to separate the very large bar and game room from the restaurant area. It has full commercial kitchens and a pokey bar along with good onsite parking and a wrap-around driveway.
An attraction is a 645sq m site that could be sub-divided from the substantial overall 2186sq m land area.
"This has a great corner location with a northern aspect and would still leave the tavern with a large site of 1541sq m," says Geerthuis.
The property is zoned Business Mixed Use under the part-operative Auckland Unitary Plan with an 18m height limit and consent has been granted for a subdivision of nine apartments on the site, with potential for 8-10 motel units subject to consent.
Down in the Waikato, a new and large format industrial property in the sought-after Te Rapa Gateway industrial park, is being marketed for lease by Sean Stephens and Theo de Leeuw of NAI Harcourts Hamilton Commercial.
Stephens says the high-stud warehouse at 520 Arthur Porter Drive, designed for logistics, distribution and storage usage, is now under construction and will be available from March next year. "It will have a floor area of 1436sq m including 232sq m of office space and a 136sq m canopy."
De Leeuw says the complex will occupy a corner site with two vehicle crossings for easy truck access and will have a substantial manoeuvring area with canopies for off-loading.
