Large Properties Across The Waikato Generate Strong Investor Interest

The sale of a Te Awamutu retail hub for more than $6 million, along with several other high-value transactions were features of Bayleys Waikato’s final commercial and industrial auctions for 2021.

Nearly all of the properties that went under the hammer in the agency’s Waikato Total Property auction in December sold at or after auction proceedings with the highlight being the $6.415 million sale of a 4,504sqm site with development potential at 39 Rewi Street in Te Awamutu.

The 2,313sqm neighbourhood retail centre featured two established tenancies to Fresh Choice and Bottle-O, returning $397,752 net pa plus GST, with a Bargain Chemist soon to occupy a third tenancy.

Willem Brown, who marketed the property for sale with Bayleys Auckland colleague Ash Hira, said its underlying value lay in the location adjacent to Te Awamutu’s main retail corridor in the central business district with a wide frontage facing directly onto the shared car parking spaces, and a covered walkway linking all three outlets.

Brown said the purchaser intends to retain the existing buildings and could consider development options in the long term.

Woolworth’s owned national franchise Fresh Choice has a year left to run on its lease of the prime 1,605sqm retail premises, while national retailer Bottle-O has a current lease running through to 2028 for its 153sqm accommodation. Newcomer Bargain Chemist has a lease agreement to 2030 with four further four year rights of renewal for its 555sqm tenancy.

“The property’s central location, surrounding residential catchment and its multiple access points naturally lend it to intensification, perhaps as a mixed-use development in the longer term,” Brown says.

The sale represents another high-value auction sale concluded in 2021 by Brown, a feat he credits with heightened investor interest and the digitisation of auction proceedings.

The Rewi Street transaction followed the sale of two industrial sites on Bruce Berquist Drive, also in Te Awamutu, which were sold under the hammer at auctions in early December 2021 by Bayleys Hamilton salesperson Josh Smith.

A 3,872sqm site at 289 Bruce Berquist Drive sold for $3.2 million, reflecting its recent, modern completion to the latest building specifications and split-risk offering from six tenancies returning $162,000 net pa plus GST.

An adjacent 2,384sqm site at 269 Bruce Berquist Drive, purpose-built and extended in 2017 to meet evolving requirements of its veterinarian services tenant, sold for $2.025 million, also by Josh Smith, with an annual rental of $95,000 net pa plus GST.

The properties were sold at respective yields of 5.06 and 4.69 percent, reflecting a persistent theme of contracting yields for well-located industrial property.

David Cashmore, director Waikato commercial notes strong interest across a multitude of buyer demographics including local, offshore and out-of-town based buyers buoyed the agency’s recent auction success, with proceedings aided during 2021 by the ability to live stream auction proceedings.

“In the eight months to December 2021 Bayleys’ Waikato commercial and industrial sales teams sold more than $48 million in properties at auction, a large chunk of which proceeded under more cautious social conditions,” he says.

“Well-located properties with strong tenant covenants or significant add-value and development potential, are generating a good level of competition at auctions across the region, and we’re pleased to offer an evolving suite of tools to accommodate the requirements of clients and customers” he adds.

He says the agency’s Total Property magazine continues to generate a strong buzz for properties offered for sale by auction, with sellers looking to this method as a way to ensure maximum exposure and achieve the best possible market price for their assets.

“Both buyers and sellers also appreciate the transparency of a sale by auction, which allows them to see what price other parties are willing to pay for the asset in real-time,” he adds.

Other high-value transactions concluded by Bayleys Waikato at the end of 2021 included:

• 3 Fergy Place, Rototuna: 1.25ha site in the master-planned Rototuna Village, occupied by Countdown supermarket, which has a 10-year lease, sold for $25,700,000 by David Cashmore, Bayleys Hamilton in conjunction with Ryan Johnson and Pete Gorton, Bayleys Auckland. The property was sold in conjunction with another Countdown supermarket in Auckland’s Mangere East, reflecting a combined yield of 4.19 percent.
• 16A Wickham Street, Frankton: A 4.1ha industrial site comprising two adjoining lots sold for $8,250,000 by Alex Ten Hove, Bayleys Hamilton. The premises is returning $295,833 net pa plus GST at a 3.59 percent yield from 14 tenants. More than 8,000sqm of surplus land is available to occupy, develop or expand with further tenancies.
• 49 Hakarimata Road, Ngaruawahia: 2.21ha of vacant industrial land offering development potential for a large-scale warehouse, transport logistics or multi-unit development, sold for $3.01 million by Alex Ten Hove and Luke Ten Hove, Bayleys Hamilton.

Bayleys Waikato is currently inviting entries for its second Total Property portfolio for 2022, which closes on Friday, February 25.

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