Budget day auction records 100 percent sales success

While much of the nation’s attention was focused around Wellington’s Beehive for the Government’s Budget announcement on Thursday, sharp-eyed commercial property investors chose to turn their backs on the new tax depreciation measures being introduced, and instead were grabbing up a range of commercial properties at Bayleys’ auction in the city.

Six of seven commercial properties which went up for auction sold under the hammer, with a further warehouse and office unit selling quickly in post-auction negotiations – all at yields ranging from 5.58 percent through to 9.09 percent.

Among the properties which sold in Bayleys’ Budget day auction were:

• A unit title retail unit at 126 Cuba Mall which sold for $956,000 for a yield of 5.68 percent
• Unit 1A office space at 155 The Terrace, with a Government tenant in place, for $1.060million for a yield of 9.09 percent
• Unit 27 Kilbirnie Plaza in Kilbirnie, with a Government tenant in place, for $620,000 at a yield of 8.3 percent
• A near new industrial site at 6 Makaro Street in Porirua, with a six year lease, for $695,000 for a yield of 8.3 percent.

Bayleys Capital and Commercial director Rohan Hill said the auction successes highlighted that property still remained a preferred investment option for many small to medium sized New Zealand investors, despite the Government’s moves to limit real estate’s investment appeal.

“It was encouraging to see so much active bidding from the floor at the same time that the Budget was removing depreciation clauses on investment property. Ironically too, the auction drew the biggest crowd in our Wellington rooms so far this year,” Mr Hill said.

“Bidders on these properties had obviously factored in the Government’s intentions for removing some of the investment anomalies - which the Prime Minister had signaled very clearly for many weeks now - and priced their valuations accordingly.

“On analysis, the prices achieved at auction on Thursday were probably identical to what would have been achieved regardless of the new tax regime – which shows that property investment has yet again held its appeal in a time of economic uncertainty.”