High clearance rate at Bayleys' auctions

Bayleys latest round of Total Property auctions in Auckland resulted in 11 out of 13 retail and industrial offerings selling under the hammer at a total value of close to $15 million.

Lloyd Budd, Bayleys Auckland commercial and industrial director, says there has been a lower level of sales activity so far this year, particularly at the higher value end of the market.

“However, vendors are now adjusting to the fact that yields and therefore prices have softened on the back of climbing interest rates.

"As a result, investors and owner occupiers are showing more interest, helped also by early signs of an easing in the still very cautious interest cover ratios being demanded by the banks on loans.

“We were a little surprised but delighted by the amount of investor interest in our latest Auckland Total Property auction offerings. We had at a total of 269 bids from 41 bidders, with 181 people watching online through our Auctions Live site in addition to those in the auction room.

"Multiple bidders on most offerings resulted in properties selling at an average of 16 percent above reserve price.”

All five retail properties put up for sale by one family trust sold under the hammer at yields ranging from to 4.69 to 6.37 percent.

James Chan, director of Bayleys Auckland based international sales division, said the properties had been accumulated over many years by the trust.

“The trustees wanted them sold so they could distribute the portfolio’s proceeds to the beneficiaries. This was reflected in the realistic reserve prices that were set, although we managed to exceed these by a considerable margin on several of the offerings because of the very strong bidding competition they attracted.”

The highest price and lowest yield were achieved for a character building in the heart of Three Lamps shopping hub which sold for $3,400,000.

The 181sq m single-level building on 336sq m of land at 293-297 Ponsonby Rd was split into three tenancies generating total annual rental income of $159,645 plus GST.

“The low yield on this property reflected the strength of the location and the longer-term upside potential of the underutilised land holding’s flexible Town Centre zoning,” Chan said.

The property was declared on the market by auctioneer Conor Patton at $3,150,000 but then eleven further bids pushed the price up a further $250,000 before the hammer came down.

Four unit-titled food and beverage and retail properties on the North Shore, marketed by Karen Yung, Quinn Ngo, Stephen Liu and Chan, were all sold on behalf of the family trust to local Asian investors.

Unit 3/8 Link Drive, comprising 363sq m two-level premises, adjacent to a busy central roundabout in the heart of the Link Drive bulk retail precinct, sold for $1,762,000.

Hollywood Bakery Espresso occupies the ground floor on a six-year lease until January 2024, with one six-year right of renewal, while Able Music Studio leases the upper level until May 2024.

This property was declared on the market at $1,560,000 and generated 23 further bids before finally selling at a 5.29 percent yield.

A 92sq m unit located at 21 Corinthian Drive, Albany leased to Yang Guo Fu Chinese restaurant for six years until mid-2025 sold for $1,300,000, a 5.76 percent yield, while a 103sqm unit at 86 Bush Rd, Rosedale leased for three years to Yasu Japanese restaurant

until November 2024 sold for $885,000 at a 5.5 percent yield, having been declared on the market at $810,000.

Another Albany offering to sell was a 323sqm retail/showroom premises at Northridge Plaza, a well-established retail hub at 100 Don McKinnon Drive, which sold for $1,780,000 at a 6.37 percent yield.

Residential real estate developer Eden Living currently uses the premises as showroom accommodation and exercised the first of two one-year rights of renewal in June 2022.

Also generating plenty of interest and bidding were two ground commercial units in the SugarTree apartment complex at 27 Union Street in the central city which were offered for sale with a $1 reserve.

Both were bare shells with resource consent for live/work accommodation but with building consent required for further development.

Marketing agent Dean Budd said there were close to 20 bidders competing for the offerings encompassing a mix of investors and potential owner occupiers.

Bidding on a 77sqm unit started at $1, increased to $100 and then jumped to $50,000. A further 47 bids followed before it eventually sold for $340,000 or $4,416 per sqm. Budd says the unit’s high stud height offers potential for approximately 156sqm of two-level, mixed-use space with four bedrooms.

Bidding on the other 82sqm unit started at $50,000 and 32 bids later it sold for $310,000 at $3,780 per sqm, with many of the unsuccessful parties on the first unit also bidding on this one.

Budd said the units had sold at higher per square metre prices than two smaller SugarTree ground floor units auctioned with a $1 reserve in March this year.

Bounded by Union, Cook and Nelson Streets, the SugarTree apartment precinct has three residential towers and is home to around 2,000 residents.

Other sales at the Total Property auctions included:

-Two retail units at 11 Tamariki Drive, underneath The Nautilus Apartments in the centre of Orewa township marketed by Christopher Moore, Alex Perigo and Stephen Liu. A 125sqm corner unit with a new seven-year lease to Dominos Pizza sold for $1,110,000 at a 5.31 percent yield. An 85 sqm unit leased for 15 years to Bay Audiology, which has just renewed for another three years, sold for $775,000 at 5.25 percent yield.

-81sqm commercial premises plus a 54sqm deck, 10 on-site car parks and basement storage locker at 64 Te Oneroa Way, Long Bay, on the ground floor of a new apartment building, sold vacant through Dev Choudhury and Steven Liu for $780,000.

-In an auction at Bayleys Takanini office, a 440sqm warehouse and office building on an 812sqm site at 301 Great South Rd with double road access was sold vacant by Peter Migounoff and Piyush Kumar for $2,450,000 after being declared on the market at $2,300,000. It was previously occupied by a tyre business.

- Article supplied by Bayleys