Prices ranged from $695k to $3.51m at Bayleys' latest Auckland commercial property auction

Property

A block of seven flats in Parnell sold for $4.025 million providing its new owners with a net yield of 3.93%

8th Mar 19, 1:59pm by Greg Ninness

There was a good mix of properties on offer at Bayleys' first major Auckland commercial property auction of the year, held on March 6 at the company's head office auction rooms in the Viaduct precinct.

Eighteen properties were due to be auctioned but three had their auctions postponed and one was withdrawn from sale, leaving 14 to go under the hammer.

They ranged from smaller back pocket investment properties that would appeal to mum and dad investors to more substantial commercial and industrial offerings that are the fare of major investors.

Sales were achieved on eight of the properties, giving an overall sales rate of 57%, with prices ranging from $605,000 for a vacant 134 square metre, first floor office unit with two car parks, in the Bishopsgate Centre in East Tamaki, to $3.51 million for a 450 square metre retail premises in the Northridge Plaza shopping complex at Albany.

However the highest price of the day was actually for a residential property - a block of seven, two level home units in Parnell that was auctioned alongside the commercial properties and sold under the hammer for $4.025 million.

The units were leased and providing net rental income of $158,565 a year, which gave the new owners a net rental yield of just 3.93%.

Yields on the commercial properties ranged from 3.51% for a hospice shop in Remuera which sold for $2.275 million, to 8.25% for a 1032 square metre office with 25 car parks in Manurewa, that was leased to an education services provider.

Details and photos of the individual properties that sold, including their selling prices and yields where applicable, are available on our Commercial Property Sales page.

Details of the block of flats in Parnell are available on our Residential Auction Results page.

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16 Comments

by theglc | 8th Mar 19, 2:13pm 1552007611

57% !!!!

Surely this is the glimmer of hope the spruikers have been gagging for!

Unfortunately it is false hope, but enjoy it while you can ........

by Ocelot | 9th Mar 19, 11:13am 1552083208

Or the sellers are starting to realise that they have to meet the market and are more willing to accept lower prices due to growing FONGO. We might be at the fear/capitulation point now with Sydney and Melbourne making it all too real. https://takloo.files.wordpress.com/2010/08/us-canada-housing-cycle-rela…

by BigDaddy | 8th Mar 19, 2:33pm 1552008817

With regard to the flats in Parnell you omitted the most important information which explains their extraordinarily high price.
Each unit had its own freehold unit title making them immediately viable for on-sale as own-your owns and a possible big profit for the buyer or speculator.
Most blocks of older flats have only one title and the cost of bringing them up to standard, issuing separate titles plus jumping through all the Council regulations makes it uneconomical in most cases.

by Greg Ninness | 8th Mar 19, 2:27pm 1552008442

The information about the flats' titles is prominently displayed in the entry for that property on our Residential Auction Results page for those readers who want to look at it in more depth.

by Narrabeen Boy | 8th Mar 19, 3:15pm 1552011348

not sure about Auckland but down in Hamilton the blocks of flats with seperate titles are not as popular as the blocks with one title as the ones on one title pay far far less in rates.Ive got a block of seven and rates have just hit the $5000 mark where as the blocks with seperate titles pay over 10k.

by Houseworks | 8th Mar 19, 7:33pm 1552026839

Have you any examples narrabeen? Hamilton is moving to Capital value rating from land value. The respective CV of the properties affects the rates charge.

by Narrabeen Boy | 9th Mar 19, 8:12pm 1552115539

Yes I think they are now.our cv went from 890k to 1.5 mil.the land value was only 350 k from memory.we were paying just over four grand to start with and now it's $5300 a year.apparently the mayor wants to start charging $500 extra per dwelling.so if that comes in it'll hurt a bit as we've got 7 dwellings so would have to pay another $3500.

by JimboJones | 9th Mar 19, 1:28pm 1552091305

Those flats sound like Simon bridges wet dreams. Some amazing investor has taken on this ‘business’ even though it is making very little profit. They will turn it around through investment such as installing insulation (to the standards most countries had last century) and maybe even a heater (if unnecessary forced by a socialist government). They may even invest up to 0.1% of the purchase price! They will probably make a loss for a while but they will quite rightly be able to offset that against some other income. Then after 10 years of hard toil (such as changing the odd light bulb) this hard working pillar of society will sell the units for a modest $4 million capital gain. After all that hard work it would be ridiculous to charge this absolute legend any tax - after all without their investment these flats may have disappeared into thin air. It’s the kiwi dream isn’t it?

by BigDaddy | 8th Mar 19, 2:35pm 1552008906

Too late.
Should have been on the headline page.
Cheers
BD

by Greg Ninness | 8th Mar 19, 2:53pm 1552010025

Actually it was up on the results page well before we published the summary story, for those who are up with the play. And displayed prominently - like a real Landmark.

by Houseworks | 8th Mar 19, 7:56pm 1552028197

I get it, Landmark and ollie newland, nice. That's if you think thats Big Daddy? But I'm not so sure, comments from BD dont align with Ollie's perspective

by Fritz | 9th Mar 19, 2:35pm 1552095320

Ha ha

by BuyLowSellHigh | 8th Mar 19, 3:19pm 1552011590

Maybe focus on your own website if you want to nit-pick about content placement? Your front page still has an interview with Greg from way back in 2016 for crying out loud. Proud moment for you I know, but can't be much going on over there if this is still front and center.

Cheer up Wolly Noland, its Friday.

by Houseworks | 9th Mar 19, 9:34am 1552077285

The point raised by Big Daddy about single title is a good one that it could make more homes available to the market. Property guru shows there are thousands of properties across the country with more than one home on the land, locked up under a single title. Those properties cover all types of buildings including blocks of flats, and standalone homes. Its unbelievable that some properties have dozens of units on one title, others have a good handful of homes again on one title. As a result there could possibly be tens of thousands of lower quartile affordable and moderately priced homes that are out of reach of first home buyers. FHB and families cannot nor want to become investors in one giant leap. The homes and units are literally by their very nature only able to be owned by investors. Most properties could be split up into separate freehold or unit strata title. To me it's an injustice that council and government perpetuate that stops them being subdivided. Potential issues are fire rating between dwellings, adequate parking and outdoor living and service courts. Even where these are sorted and there are no issues the council makes it very very difficult and long winded to get consent. Then IRD want a slice of the pie by taxing the "subdivision". As Narrabeen Boy alluded to there could be more rates take for the council. Imagine if at the stroke of a pen there were more homes available to First Home Buyers, what would that do to help meet demand and the falling home ownership figures?

by Nzdan | 9th Mar 19, 2:24pm 1552094689

But wouldn't that just remove houses from the rental pool? I heard on here that there are more occupants in a rental than owner occupied property.

by Houseworks | 9th Mar 19, 2:47pm 1552096042

I dont think so. A tenant would be able to buy their own unit and not even shift. Win win possibly.