Hammer falls on three hands-off investment properties

With three out of four commercial properties selling under the hammer at Bayleys Wellington’s Total Property auctions on June 25, indications are that the property sector remains the preferred investment arena for a variety of private investors.

Net yields achieved ranged from 7.1 to 12.46 per cent and Mark Hourigan, director of Bayleys Wellington, says the continued demand for good quality investment property – in all price ranges – is heartening in the current economic climate.

“A large crowd attended the auctions and strong bidding was received on all properties. Coupled with numerous tenders on commercial properties closing this week with multiple bids on all of them would indicate that the property sector remains a sound investment choice,” says Mr Hourigan.

“All three properties have stable, long-term leases in place to established and reputable tenants and are in proven locations. All of these factors allow for a hands-off investment and elevate the desirability of an investment proposition in any market.”

A high-profile property in Station Street in the heart of Napier’s bulk retail area, sold for $557,500 at a yield of 12.46 percent. Marketed by Andrew Smith of Bayleys Wellington and Bill Brown of Bayleys Napier, the 2964sq m leasehold site on one of Napier’s busiest arterial routes and close to the CBD has a long term lease in place to Burger King. Formerly a Georgie Pie franchise, the property is surrounded by other high-profile national retailers and remains a sought-after location for investment properties.

The TAB outlet at 10A The Strand, Wainuiomata also marketed by Andrew Smith of Bayleys Wellington, sold at auction for $332,000 at a yield of 7.1 percent. The TAB has occupied this unit since it was built around 20 years ago and they have just exercised their next right of renewal with the lease now in place until 2012.

One buyer took the opportunity to invest in the capital’s active accommodation market by successfully bidding for two unit titles in the 14-storey Quest on Johnston apartment complex in Johnston Street, marketed by Chris Callear of Bayleys Wellington. The two freehold strata-titled units – 1A and 2B - with personal rent guarantees were sold together for $421,000 at a yield of 10.45 percent, well below the current capital valuations.

Unit 1A comprises the ground floor reception space and lobby of the building plus staff kitchenette and toilet facilities. Unit 2B is on the first floor and the space is subdivided into three rooms – a conference/meeting room, an office/store room and a storage area with a total lettable area of 192.92sq m.

Meanwhile, Units D and 1C, on the first level of the 16-storey Quest on The Terrace apartment building in Wellington, were passed in at the Bayleys Total Property auction. With a total lettable area of 102.13sq m comprising ground floor office, administration and storage space along with a small west-facing studio apartment, the units have separate leases with the next renewal in 2011 and final expiries of 2021. The two units return a total net income of $35,000 plus GST (if any).