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The sale of the 15,000m2 two-building complex, in which Auckland Council is the anchor tenant, on a 7,862m2 site at the junction of The Strand, Hurstmere and Lake Roads, is the largest property sale transacted on the North Shore so far this year. It was negotiated by Simon Aldridge of Bayleys North Shore Commercial, in conjunction with Paul Hain of Bayleys Auckland office.
The property has been purchased by a New Zealand based private investor at an 8.4% yield. The council entered into a 12 year lease in 2009 over the office space. The balance, comprising 2,039m2 of retail space, is occupied by 12 tenants. Bayleys North Shore Commercial director Daryl Devereux says the sale contributed to over $100 million worth of transactions in October, a record month for the agency. “2014 looks set to be the busiest year the commercial and industrial property market has experienced since the Global Financial Crisis and is also likely to be the best year Bayleys North Shore Commercial has had since it was established in 1997,” Daryl says. “This reflects a combination of a buoyant market, driven by a strong economy, and growth in our agency business.”
Daryl says another substantial office transaction is close to being concluded by Bayleys North Shore Commercial and the year has also seen a number of significant industrial sales. He and Matt Mimmack were involved in the sale of an eight-year-old warehouse and office building occupied by two tenants on a 5,282m2 site at 62 Apollo Drive Albany, for $7,250,000 at a 7.4% yield. A 4,788m2 industrial building on a 9,100m2 site at 231 Archers Road, Wairau Valley occupied by multiple tenants on short term leases, sold for $7,200,000 at a 6.2% yield through Ranjan Unka.
High volumes of sales and leases are also being undertaken at the smaller value end of the market with sales under $1 million and leases under $50,000pa continuing to account for a significant portion of the number of transactions Bayleys North Shore concludes, says Daryl.
“Smaller businesses are very active in the market either leasing office, industrial and retail units or buying premises for their own occupation. Many are relocating because they are expanding which bodes well for the North Shore business sector.”
Daryl says sole agencies have proved to be the most successful way of securing business occupants for landlords. A recent analysis of its agency arrangements by Bayleys North Shore Commercial shows that it is taking an average of 62 days to conclude a sole agency transaction compared with an average of 90 days for a general listing.
There is an acute shortage of good quality, larger industrial premises across the Shore, with vacancy rates at historically low levels, which is resulting in multiple offers being received from tenants on a number of properties, says Daryl. “Unfortunately, there is very little land zoned for industrial development left on the Shore which will force more expanding, larger businesses wanting additional warehouse or factory space to relocate to other parts of Auckland. This is already happening and if it continues it will be a big loss to the North Shore economy.”
Daryl says a shortage of development land across all sectors of the market is resulting in strong competition for sites that do come up for sale. A total of 88.5 hectares of land in two titles at 1595 East Coast Road, Redvale, has recently sold for $8,800,000 through Brian Caldwell, Ranjan Unka and Daryl Devereux. Bordering Weiti Station, the property attracted nine tenders, with the purchaser intending to undertake a lifestyle subdivision.
Earlier in the year, one of the last substantial parcels of vacant commercial land remaining in the Wairau Valley, encompassing a 7,138m2 site running between Wairau Road and View Road, was purchased for $5,000,000 by the next door neighbor, Southern Cross Hospitals. The site was sold at $700/m2 by Bayleys North Shore Commercial’s Ranjan Unka, Trevor Duffin and Nick Howe-Smith.
Owner occupiers have been an important segment of the North Shore commercial property market for a number of years, says Daryl, with a continuing low interest rate environment meaning many businesses are borrowing to buy at a similar cost to renting.
Bayleys North Shore Commercial has followed this trend itself by purchasing a property on the corner of Northcroft and Auburn Street and reconfiguring and refurbishing it for its own occupation. Renamed Bayleys House and directly opposite Bayleys Takapuna residential office, the new premises will provide an improved standard of accommodation for both staff and clients, says Daryl. “It will enable Bayleys North Shore Commercial to continue growing and expand the full range of property services provided by the Bayleys Group to the North Shore commercial market.”
Contact: Daryl Devereux: Phone 489 0984 or 021 647 773. Email: Daryl.Devereux@bayleys.co.nz
Channel Magazine: Issuu 50 December 2014 | January 2015