Strong bidding for retail units at Bayleys auction sees yields mostly in the 5-6% range

Strong bidding for retail units at Bayleys auction sees yields mostly in the 5-6% range
Commercial units such as this Pita Pit shop proved popular with investors

Rental yields were mostly in the 5-6% range at this week's Bayleys commercial property auction held at their Viaduct Harbour rooms in Auckland's CBD.

Twenty three properties were put up for auction with 13 selling under the hammer and 10 being passed in for sale by negotiation.

There was particularly strong bidding on a group of shops at Albany that form part of The Foundation, a new retail complex recently completed..

Nine shops in The Foundation were put up for auction, which was the final tranche of 23 retail premises in the complex to be sold down by the developer.

The bidding was particularly intense for the smaller of these properties, with floor areas of 56-58 square metres operating as convenience food outlets, they had  nine or 10 year leases to operators such such as Tank Juice, Pita Pit and Bruce Lee sushi.

These all sold in the $575,000 to $580,000 range providing net rental yields of 5.4% to 5.6%.

Even the fact that one of these smaller units did not have a tenant was no barrier to it selling under the hammer at $480,000, a 17% discount to its tenanted neighbours.

The larger units in the complex, with floor areas of 111-193 square metres were not quite so keenly sought after, with two selling under the hammer, one for $1 million providing a 6.5% yield and the other selling for $930,000 providing a 6.6% yield.

Three other larger units in the complex were passed in.

There was also very strong bidding on two blocks of strip shops, one at Orakei the other in Kohimarama.

The Orakei property was an older block of four retail shops with offices above sitting on a large 1108 square metre site, providing potential redevelopment opportunities.

It sold for $2.875 million providing a 5.1% yield.

The complete results are listed below:

  • 78 Coates Ave Orakei. An older retail/office complex with seven garages at the rear on a 1108sq m site. Fully leased at $146,232 + GST a year. Sold for $2.875 million.
     
  • 301-305 Kepa Rd, Kohimarama. A block of six shops used as retail premises, a dental practice and offices, returning $167,856 + GST. Sold for $2.72 million.
     
  • Unit 10, 270 Oteha Valley Rd, Albany. A 58sq m shop leased operating as  Pita Pit., rented at  $31,071 a year, on a 10 year lease with annual reviews to CPI + 1%. Sold for $575,000.
     
  • Unit 8, 270 Oteha Valley Rd, Albany. A 58sq m shop operating as Bruce Lee sushi bar, rented for $31,071 on a nine year lease with annual reviews to CPI + 1%. Sold for $580,000.
     
  • Unit 12, 270 Oteha Valley Rd. A 57sq m Tank juice bar, rented at $32,602 + GST on a 10 year lease with annual increases of 3%. Sold for $580,000.
     
  • Unit 13, 270 Oteha Valley Rd, Albany. A 56sq m vacant shop next to the Tank juice bar. Sold for $480,000.
     
  • Unit 20, 270 Oteha Valley Rd. A 189sq m shop operating as a liquor outlet, rented at $65,033 + GST on a eight year lease with reviews to market every two years. Sold for $1 million.
     
  • Unit 14, 270 Oteha Valley Rd. A 107sq m shop operating as an Oporto restaurant. It was rented at $61,410 + GST a year on a 10 year lease with annual reviews to CPI + 1%. Sold for $930,000.
     
  • 2 Newark Place, East Tamaki. An 848sq m warehouse/office building on a prime corner site, rented at $60,000 + GST. Sold for $1.09 million.
     
  • 6 Newark Place, East Tamaki. A 714sq m warehouse/office building in two tenancies on a 1012sq m site. Rented at $45,217 + GST. Sold for $822,000.
     
  • 11 Tawari St, Mt Eden. A standalone property with mixed use zoning giving it development potential. Leased to an established business until 2020 at $102,298 + GST a year, with annual increases of 3%. Sold for $1.61 million.
     
  • 17C Joval Place, Wiri. A 1980s 278sq m warehouse/office rented at $25,500 + GST, sold for $400,000.
  • 581 Sandringham Rd. A 260sq m building on a 357sq m site in the middle of the Sandringham retail strip, operated as vehicle service station for many years. The owner-operator of the property and business was retiring and the site had potential for a mixed use redevelopment and sold for $1.21 million.

The following properties were passed in for sale by negotiation:

  • Unit 9, 270 Oteha Valley Rd, Albany. Retail cafe/bakery.
  • Unit 11, 270 Oteha Valley Rd. A 114sq m nail salon.
  • Unit 19, 270 Oteha Valley Rd. Vacant 193sqm retail premises.
  • 10 Birmingham Rd, East Tamaki. A childcare centre/swimming school on a 1524sq m site.
  • Unit 11, 239 Queen St, CBD. A 30sq m shop in the Mid City complex.
  • 738 Great South Rd, Penrose. A 661sq m building with two retail premises and a warehouse on a 1340sq m site.
  • 3 Bank St, Whangarei. A complex of three shops returning $35,600 + GST.
  • 64 Boundary Rd, Papakura. A 960sq m  warehouse on a 8858sq m site, returning $205,000 a year.
  • 9C/17 Albert St, CBD. A vacant, strata titled 347sq m office suite in General Equity House opposite the Stamford Hotel.
  • 43 Anzac Street, Takapuna. A 21 unit motel with three bedroom manager's home and office, on a 1725sq m site, offered as freehold going concern achieved a top bid  $3.225 million.

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