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Plenty of fare for smaller investors among Bayleys' latest commercial sales with prices starting at just $520,000

Plenty of fare for smaller investors among Bayleys' latest commercial sales with prices starting at just $520,000
This vacant property at Te Aro in Wellington sold for $1.55 million.

Low to mid-priced investment properties were to the fore in the latest batch of commercial property sales reported by Bayleys Real Estate in Auckland and Wellington.

And a sizeable portion of them were vacant, although investors are obviously not shy of acquiring properties that lack a tenant.

A dozen commercial sales were reported in Auckland, with prices ranging from $600,000 for a vacant 106 square metre retail unit in Manurewa, to $6.75 million for a 2372 square metre light industrial building and office on a 4001 square metre site in East Tamaki.

The property was leased to a food processing business and provided a net yield to the new owner of 6.37%.

Of the 12 Auckland sales, five were of vacant properties and the yields on the tenanted properties ranged from 4.41% for a 350 square metre warehouse that was part of a new complex in Onehunga, to 7.55% for a 103 square metre retail unit with two car parks in Newmarket.

Of the seven commercial sales reported by Bayleys in Wellington, six were vacant.

The only tenanted sale was a large industrial property with 12 tenancies at Otaki, which sold for $2.4 million, providing a net yield of 9.05%.

Prices on the vacant properties ranged from $520,000 for a 180 square metre office suite in Kaiwharawhara, to $1.55 million for a 208 square metre character building in Te Aro that formerly housed The Bresolin pub.

Details and photos of all of the above properties are available on our Commercial Property Sales page.

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3 Comments

How do you calculate the yield on an unleased commercial property in the current climate? Using the rent from the previous tenancy might be over stating it for some sectors one would think? Is there any data around on commercial rents?

It's a hard thing to measure. Main issue with CP is that rates are fixed so all the give is in the rent.

We had a few shops in the UK where during the 2014/16 pre Brexit period rents rose over 100%. Those shops (which we sold) are now back at 2013 levels but probably more interesting is that both of our legacy tenants closed up for Covid and decided not to reopen, rather to do esales only.

So my view is for general retail (outside the big malls) times are going to get very very tough. Newmarket high street now Westfield has opened is full of empty units. Remuera village also has a lot of empty units. If you owned one of these and were paying rates paid suggest you'd be happy to get a tenant in on any terms.

Tough times ahead.

There is no yield on a vacant property because it's not producing any income. You could calculate a potential yield based on potential rent at a given price, but essentially you'd be taking a punt based on your knowledge of the market.

Days to the General Election: 21
See Party Policies here. Party Lists here.