Auctions driving landmark sales

Westgate Massey was one of the biggest deals for Bayleys commercial real estate team.

Bayleys says its commercial and industrial listings magazine Total Property has helped drive some of the country’s landmark real estate sales.

As the publication turns 20, True Commercial looks back at some of those defining sales.

One of the biggest was the auction, in December 2008, of the former Auckland City Council works depot on Cook St. The property sold for $43.5m, a record price for a single property at auction.

The sale was conducted by Bayleys Auckland senior commercial broker (now director investment sales) Robert Platt and executive director David Bayley.

Bidding opened at $25m and progressed in $1m and $500,000 lots to $40m. After further negotiations the property came back on the market at $43.5m and sold under the hammer.

David Bayley later noted its significance, saying: “Despite the challenges the property market is currently facing, we had widespread interest in the site and most of New Zealand’s most prominent property players were at the auction.

“We see a sale of this scale as a big vote of confidence in the long-term future of Auckland’s CBD.”

The 125 properties and businesses on offer in the first of the 2010 Total Property portfolios was hailed by Bayleys as the biggest ever produced for that time of year.

The buyer response showed a confidence that belied the brittle environment as the economy struggled to muster a post-GFC recovery.

In his magazine welcome, Bayleys managing director Mike Bayley wrote that “a realigning of business activities means ‘fringe' properties not essential to core business will continue to be sold off as part of corporate rationalisation”.

The sale of New Zealand Retail Property Group's holdings of shops in the Westgate Shopping Centre in Massey, Auckland, and the Fraser Cove Shopping Centre in Tauranga, was one of this country’s biggest sell-downs of retail property.

Some 20 sales, totalling $64m, were completed, with tenants reading like a ‘Who’s Who’ of retail.

In June 2014, four industrial properties owned by Bell Tea were listed for sale by international tender.

The four-page Total Property spread and marketing saw 99 parties quickly register interest. The properties, including two plants which produced three million tea bags a day, were sold to different buyers for $18.65m. The largest sale of $10.8m was achieved for Bell’s main production plant and head office, one of three portfolio properties in East Tamaki, Auckland.

All three sold with 12-year leases plus rights of renewal extending into the 2030s.
The 5463sq m head office, on a 1.3745ha site, sold at a 5.8 per cent yield.

Also included was Bell’s 95-year-old, 2623sq m processing and warehouse facility in Hope St, Dunedin. It was designed and built for Bell in 1924 and added to in the 1950s and 1980s.

The four-level property, which required seismic strengthening, sold with vacant possession for $335,000 to Dunedin developer Peter Gullen.

But it was a KFC site in Porirua that was arguably the most fiercely-contested of Total Property auctions in April last year.

The 230sq m restaurant, on a 1855sq m corner site beside the North City shopping centre, came with a six-year lease to Restaurant Brands, plus a 12-year right of renewal.

The auction ran for 45 minutes, with 168 bids, before the restaurant was sold by Mark Sherlock of Bayleys Wellington to a local investor for $2.75m, well above its rateable value of $1.57m, at a yield of 4.91 per cent.

Auctioneer Richard Valintine says the price vindicated the sales method. “If we were selling this by private treaty, the vendor might have been comfortable to accept a lesser price, thinking that’s an acceptable yield. But an auction is about letting the market speak.”

Another flurry of interest greeted the former Turakina Māori Girls’ College, near Marton after appearing in Total Property in February 2018.

Twelve buildings totalling 3000sq m on 5.16ha of freehold land included classrooms, dormitories, a hall and gymnasium, kitchen, swimming pool, chapel and sports fields.

Bayleys Palmerston North director Karl Cameron said at the time it was a virtual “turn-key” operation which could sustain food and beverage, accommodation and educational services.

It was steeped in culture, with a chapel and carved waharoa (framed entrances), pou whenua (totem poles), tukutuku (flax wall tapestries) and kowhaiwhai (carved or painted wooden beams).

It was sold by tender to Rangitīkei iwi Ngāti Apa and the iwi later announced plans for an education, training and employment centre. Property records show it changed hands for $450,000.

One quirky transaction saw the sale of sheep-shaped buildings which helped spark Tirau’s reinvention as the world’s “corrugated iron capital”.

The iron-clad buildings, on a 2103sq m corner site on State Highway 1, were sold for an undisclosed sum in late 2016. The capital value was recorded as $1.16m.
The landmark ASB Bank, in Napier’s CBD, was the latest in a string of historic buildings for sale in the city when listed in August 2018.

The 87-year-old, two-storey building with a Category 1 heritage listing is one of about 140 buildings that rose from the ashes of the 1931 earthquake in art deco or Spanish mission design. The strengthened building, with a 1038sq m floor area and ASB as lead tenant, was sold by salesperson Sam MacDonald for $2.65m.