Continuing low interest rates which appear set to stay low for the foreseeable future are reflected in the returns from these commercial sales.
A few years ago the returns would have been typically 9-10%. Now 7% yields more or less seem to be the norm. In other words investors are paying around 20% extra for cash flow returns from good properties. Solid bricks and mortar from assets that can be touched and felt are becoming the preferred investment over the vagaries of the share market and the like.
Published 29 September 2011
Bob Dey report
A new Toyota caryard & showroom at Takanini was sold under the hammer on a 7.2% yield at Colliers International’s commercial action on Wednesday and a Milford factory & warehouse has been sold vacant.
The Milford building was vacated by Miles Nelson Manufacturing Co Ltd after 50 years as the company moves to bigger premises.
Negotiations were continuing for sale of the top floor of a High St office building. Auction results:
Milford, 226-228 Kitchener Rd, 1700m² useable area on 2484m² site, 1384m² factory, warehouse & mezzanine, 252m² office space, 14 parking spaces, sold post-auction for $1.35 million (Andrew Hiskens & Josh Coburn)
Queen St Valley
5 High St, level 7, 400m² top floor, high-stud office, new 6-year lease returning $117,000 + gst/year, opex $70/m² payable by tenant, passed in at $1 million(Charlie Oscroft & John Davies)
Takanini, 300 Great South Rd, new design-build Counties Toyota showroom & carsales yard on 10½-year lease, 724m² building on 2676m² site, net rent $245,000 + gst/year, sold for $3.411 million (Charlie Oscroft & John Green)NPT Ltd has unconditionally sold its property at 36 Sel Peacock Drive, Henderson, for $7.301 million, 6.6% above its March book value. Settlement will take place on 7 November.Acting chief executive officer Kerry Hitchcock said today: “This is an excellent result for the Henderson property, with the sale price above the valuation of $6.85 million as at 31 March. The sale of this property allows NPT to retire some debt and to reinvest in properties where we believe we can add value and enhance returns to our shareholders.”The 2-level 4007m2 office building is leased to the Ministry of Social Development for 8 years from 27 October 2011. Mr Hitchcock said the lease was structured as a gross lease and net rental after opex reflected an 8.66% return. The property was marketed by Paul Dixon of Bayleys Real Estate.