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welcome to our second insite for At Barfoot & Thompson we o er so much more to Auckland than just real estate services. Since our last portfolio we have been active sponsors of both the 2017 World Masters Games and the recent British Lions Rugby Union tour. These two superb events have added so much to the vibrancy and economy of our great city. It s not only our great city that has been having a fantastic time we too have achieved a record first quarter for the number of sales and leasing transactions completed. At the time of our last Insite Portfolio we stated that we had negotiated 100 million in conditional contracts for Auckland CBD properties. We are pleased to report that as much as 84 million have now completed. The ability to connect with our huge network of colleagues who are so well represented in the new immigrant and o shore markets continues to prove a significant point of di erence between us and other commercial agencies. It is also becoming evident that there is a growing awareness that direct investment in Auckland commercial property o ers an uncomplicated combination of both yield and capital gain in the New Zealand property market. The availability of trading bank finance continues to challenge many participants but we are buoyed by the outlook for the macro market environment. The Reserve Bank of New Zealand notes that the outlook for global economic growth has increased and become more broad based over the past six months. This optimism from o shore continuing net migration and still further population growth underpins Auckland s growth trajectory. In our specific commercial property markets we are seeing vacancy rates across all sectors at historic lows. Rental levels for industrial properties are on the rise substantially pre-leased o ce development in the CBD and major centres such as Sylvia Park are also a feature of the market. Consumer confidence and spending is similarly improving the prospects for retail property whilst both occupiers and investors alike remain active. Within the context of this environment our team of 70 agents operating throughout the Auckland region have assembled this our second Insite portfolio for the year with its wide range of opportunities for your consideration. We look forward to introducing them to you and to assisting you in meeting your commercial property requirements. PETER THOMPSON Director KIRI BARFOOT Director contents 6 7 8 10 East Street 40-44 Bolderwood Place 12 Moore Street 239 & 241 Othello Drive 51 Corsair Lane 786 Papakura Wiri Howick Clover Park Ardmore East Tamaki Flat Bush Bucklands Beach Panmure Panmure Onehunga City Centre City Centre Parnell Mt Eden Newmarket Newmarket Kingsland Kingsland City Centre City Centre Grey Lynn Grey Lynn 33 Great North Road 397 Coles Avenue 7 13 Henderson Mt Eden Glen Eden Mt Roskill Mt Roskill New Lynn Glendene Henderson Massey Albany Wairau Valley Albany Albany Rosedale Ruakaka Gisborne Hobsonville East Tamaki East Tamaki Manukau East Tamaki East Tamaki Manukau 34 35 Great North Road 4055-4059 Dominion Road Extension 1370-1376 Richardson Road 211 11 12 13 16 East Tamaki Road 417 Ormiston Road 542 Hattaway Avenue 81 83A & 83B Domain Road 2 Queens Road 133 36 37 38 39 40 41 Great North Road 3002-3006 Hepburn Road 139 Pioneer Street 10 Triangle Road 215-217 Orbit Drive G2 & G3 4 Poland Road 18 Rosedale Road 40 17 18 19 20 21 22 23 24 25 28 29 30 31 Captain Springs Road 134 Victoria Street West 103 Customs Street East 55 Parnell Road 155 Edwin Street 6 19 Broadway 130 Broadway Unit 4B 142 Kingsland Terrace 2 New North Road 516 Anzac Avenue 49-55 Kitchener Street CA 40 Scanlan Street 33 Putiki Street 8 42 Corinthian Drive 25 Airborne Road 21 10 43 Marsden Point Road Albert Street 17 44 Rawiri Road 8 4 East Tamaki Road 363 45 47 Pukekiwiriki Place 27 Osterley Way 3 Highbrook Drive 80 48 Pukekiwiriki Place 12 Amersham Way 22 DISCLAIMER Barfoot & Thompson and the vendor are not to be held responsible in contract tort or in any other way for any inaccuracy in omission from or other defect of whatever kind contained in this publication and the recipient waives any rights which it might have now or in the future against Barfoot & Thompson or the vendor in receiving this publication. The recipient also acknowledges that Barfoot & Thompson or the vendor do not give any warranties or other assurances regarding the correctness or accuracy of information contained within this publication. The contents of this publication do not form part of a contract. Auckland Property Market MARKET COMMENTARY COURTESY OF IAN MITCHELL DIRECTOR LIVINGSTON & ASSOCIATES S trong growth in Auckland s economy has continued to drive the region s commercial and industrial property markets. Robust market fundamentals combined with low interest rates have helped maintain investor demand for properties. However the availability of credit is starting to impact on some potential purchasers limiting their ability to leverage deals. An overview of the key sectors within the market includes Auckland s strong regional economic growth has resulted in an additional 32 600 employees in the typical o ce occupying businesses over the last five years. This has increased the demand for o ce space and resulted in net absorption of 123 000 square metres in the CBD and 114 000 square metres in the metropolitan market over the last five years. Growth in demand combined with low vacancy rates has meant tenants increasingly have had to consider B grade space due to a lack of vacant supply in prime and A grade buildings or alternatively consider fringe city locations. The supply side of the market has started to respond to market pressures. Construction activity has increased as developers look to take advantage of low CBD vacancy rates and ongoing rental growth. There is now 82 000 square metres of o ce space under construction in the CBD and a further 73 000 square metres under construction outside the CBD. Once completed these buildings will place upward pressure on vacancy rates. Investor demand for good quality stock remains strong. The industrial market continues to experience strong underlying market fundamentals with increasing demand low vacancy rates increased rents and strong investor demand. However some market drivers are starting to change. Anecdotal evidence suggests banks are rationing credit to developers which is impacting on their ability to respond to demand. Land values remain high and combined with growth in construction costs this also means it is di cult for developers to create the additional space required. These are all typical characteristics of a late cycle upswing in market activity. The implications of the Unitary Plan are still flowing through into the market. In areas which have been rezoned Mixed Use commercial and industrial occupiers are now having to compete with residential developers for buildings. Landlords are now preferring to o er shorter term leases to position themselves so that they can take advantage of any future redevelopment opportunities. Consequently an increasing number of tenants are looking for owner occupier style opportunities so they can secure premises for their business in the medium to long term. Retail property continues to experience strong demand for space with limited space available for lease in prime locations. Ongoing population growth driven by historically high levels of net overseas migration gains combined with low interest rates and increased house prices should continue to support retail sales growth although this is unevenly distributed across di erent store types. Consumer confidence in Auckland remains strong supporting growth in retail sales. Investor appetite for retail investments has continued to outstrip supply of properties available for sale and yields continue to firm. New Zealand is entering its eighth year of sustained economic growth and is expanding at its non-inflationary potential. Key national economic growth drivers include accommodative monetary policy strong population and robust expansion in the tourism sector. Auckland region s economy is expected to continue to grow at above average rates supported by strong migration led population growth (currently 2.8% per annum) ongoing construction activity and infrastructure development and a robust tourism sector. Strong population growth has also supported significant growth in house values. 2. BARFOOT & THOMPSON COMMERCIAL INSITE August 2017 Table 1 presents the trend in key market indicators by market sector. Table 1 Property Market Indicators O ce Market Last 12 Months Vacancies Rents Down Prime Up Secondary Up Next 12 Months Up Up Industrial Last 12 Months Steady at low levels Up Next 12 Months Steady Up Last 12 Months Steady at low levels Steady Retail Next 12 Months Flat Up Short term outlook is for current market conditions to continue as Auckland s strong regional economy boosts employment growth which will continue to drive demand for more space across all three sectors. 4 000 Figure 1 Commercial and Industrial Building Sales Annual O ce and Industrial Building Sales in Excess of 2 Million in Auckland 3 500 3 000 2 500 2 000 1 500 1 000 500 0 O ce Buildings Industrial Buildings Figure 1 presents the growth in the value of commercial and industrial building sales in the Auckland region with sale prices more than 2 million. 2000 2002 2003 2008 2009 2005 1998 2012 1999 2004 2006 2010 2013 2011 2007 2001 2014 1996 2016 1995 1997 The volume of sales remains robust however a lack of good quality stock available for sale is limiting the volume of sales activity. There is still strong competition for modern well leased commercial buildings from a range of investors. Current low interest rates are continuing to support investor demand although anecdotal evidence suggests banks are starting to ration credit. Expectations of future increases in interest rates may impact on the market in the future. Table 2 summarises current yields by sector their outlook over the next six months and the level of investor demand. Table 2 Yields and Investor Demand by Sector Sector Typical Prime Quality Building Retail O ce Industrial 4.00% to 7.00% 5.50% to 6.75% 5.00% to 6.25% Yields Typical Secondary Quality Building 4.00% to 7.00% 6.50% to 7.50% 5.75% to 7.00% Outlook Steady Steady Steady Strong Strong Strong 2017 YTD 2015 Investor Demand The industrial investment market is very strong with limited good quality properties available for sale. Owner occupiers are also active in the market trying to secure long term premises with strong competition from alternative use development. Demand for o ce and retail building investments also remains strong with demand for properties exceeding the number of good quality investments being o ered for sale. Current yields demonstrate the strong competitive nature of the current market and are typical of late cycle conditions. Every e ort has been made to ensure the soundness and accuracy of the opinions information and forecasts expressed in this report. Information opinions and forecasts contained in this report should be regarded solely as a general guide. While we consider statements in the report to be correct no liability is accepted for any incorrect statement information or forecast. We disclaim any liability that may arise from any person acting on the material within. BARFOOT & THOMPSON COMMERCIAL INSITE August 2017 3. 350 Queen St CBD 27 Hargreaves St Freemans Bay Fully refurbished warehouse of some 296m on 304m of freehold land was sold with vacant possession for 2 680 000. Zoned Mixed Use with an 18m height limit - Reese Barragar Mixed Use. Sold to developer for 10 750 000 representing 3 998 m land value - Murray Tomlinson & MarieAnne Molloy 929 New North Rd Mt Albert 68 210-218 Victoria St West Victoria Quarter 250m freehold character o ce unit sold with vacant possession to an owner occupier for 1 285 000. 5 140 m land and buildings - Reese Barragar 4 876m nine level building situated on 1 178m high profile corner site opposite Aotea Square returning 2 775 000. Sold May 2017 for an undisclosed sum - John Stringer & Cam Paterson 436 Broadway & 89 Nuffield St Newmarket 46-48 Pollen St Grey Lynn 627m freehold land boasting three street frontages returning a net income of 205 774. Tender process produced eight tenders and sold for 4 810 000 at 4.28% - Shaydon Young & Cam Paterson Stand-alone freehold retail building in Mt Albert s shopping centre sold for 575 000 with vacant possession to an investor. IEP rating of 34% with a land area of 137m - Reese Barragar Two separate leasehold titles of 1 002m and 807m spanning three street frontages. Located next to the Newmarket viaduct. Successfully sold for 2 950 000 by way of Tender - Rex Fowler & Cam Paterson 24 Williamson Ave Grey Lynn 280m building on a 353m fee simple site with Mixed Use zoning and 27m height limit. Sold vacant possession to an investor for 3 010 000 - Murray Tomlinson & Cam Paterson 1228 Dominon Rd Mt Roskill This retail investment provided a passing net income of 42 000 plus GST and outgoings. The land is zoned Local Town Centre and sits on a freehold parcel totalling 159m . The property was sold at Auction to an investor for 815 000 or a 5.15% yield - Nick Wilson & Cam Paterson 376 Great North Rd Grey Lynn A 570m building with a passing net income of 187 000 GST and outgoings on a six year lease term to Supreme Co ee. The building area comprised 438m on the ground floor and 372m basement level. The building sold for 4 000 000 representing a yield of 4.65%. Furthermore the property was also leased by the selling agent - Grant Magill Units 3D & 3E 153-187 Broadway Newmarket The Homestore in Rialto. This property comprises 540m in one tenancy. Sold with the long term tenant in place on an eight year lease and returning 251 996 GST p.a. The price reflected a yield of 6.75% - Andrew Clark 65 Carr Rd Mt Roskill This property comprises 1 019m of land with a 945m building. The property was sold with vacant possession to an owner occupier for 1 850 000 before it hit the market. The price reflected 1 958 m for building and 5.51% on the previous rental - Nick Wilson 41-43 Gillies Ave Newmarket Large corner development site of 2 689m adjacent to central Newmarket zoned 4. BARFOOT & THOMPSON COMMERCIAL INSITE august 2017 5 1978 Great North Rd Avondale Freehold retail investment property returning 49 735 net leased to a post and stationery shop. Sold for 660 000 to an investor representing a 7.5% yield - Reese Barragar & Colin Stewart 17B Joval Pl Wiri A 285m unit with four car parks with vacant possession. It sold to an owner occupier for 825 000 representing 2 895 m for building - Nick Wilson 595-599 & 601 Beach Rd Rothesay Bay Three road front shops in Rothesay Bay plus 224m freehold land to the rear on separate title. Sold for 1 050 000 - David Cannon & Gary Seekup 2E Larsen St Otara Retail building comprising 390m on Larsen Street in the suburb of Otara. The property was sold vacant possession by Auction for 600 000 - William Koreman 16 33 Apollo Dr Albany 6 1976 Great North Rd Avondale 33 Dunnotar Rd Papatoetoe This fee simple section comprises a tidy three bedroom house with road frontage onto Dunnotar Road and yard road frontage to Webster Lane. The property was sold post-Auction for 1 000 000 Anton Fatkin Ground floor multi-tenanted investment property with two retail shops and a potential residential flat at the rear. Sold for 895 000 representing a 7.8% yield - Reese Barragar Colin Stewart & Chris Peterson 123 Vincent St Howick Small ground floor 116m o ce unit including three car parks returning 32 620 net. 5.4% yield. Sold for 595 000 - Aaron Smith & Elaine Tutty Unit 6 40 Arrenway Dr Albany Sold vacant to an owner occupier. Two level o ce showroom building with New York loft style layout with high ceilings and skylights. Approx. 93m sold for 450 000 - Brian Paulin 63-65 Victoria St Onehunga A 2 716m development site comprising a 1 485m warehouse plus two residential dwellings providing a total passing income of 141 720. It sold for 2 750 000 representing 1 013 m for land. This property had been through a previous campaign with another agency so to achieve a sale so quickly at a very good price was a huge result - Nick Wilson & James Marshall 42 View Rd Wairau Valley 378 Neilson St Penrose Approx 610m standalone industrial premises split over two tenancies comprising retail industrial and o ce uses with its own exclusive car parking. The property was sold by Tender for 1 700 000 - Anton Fatkin Unit D 12 Tironui Rd Takanini An industrial unit of 217m located in central Takanini having a ground floor plate of 178m and mezzanine o ce and amenities of 39m . The property was sold by Deadline Private Treaty for 490 000 - Craig Brunt Building of 2 036m on a 3 729m site sold for 4 300 000 with vacant possession. 2 111 m for land and building. This sale by negotiation was a great result for the vendor - Chase Erceg & Josh Warren 74B Ellice Rd Wairau Valley 825m of Light Industrial land comprising a 403m warehouse with small o ce. This property sold with vacant possession to an owner occupier for 1 475 000 representing 3 600 m for building or circa 4.75% on a market rent - Nick Wilson & James Marshall 156B Main Rd Kumeu 7-9 Basin View Ln Panmure Built in the 1960 s with three tenancies on one title comprising a two level commercial building three lock-up shops with individual access and amenities. The property was sold for 800 000 - Jane Chen Classical Wairau Valley industrial unit of 196m - high stud clear span with excellent access low o ce component and o ered with vacant possession. Sold for 700 000 - David Cannon & Elaine Tutty Multi-unit industrial premises returning 110 000 GST sold for 1 660 000 representing a 6.8% yield. Building size of 1 000m on a stratum in freehold site - Simon Farland & Chase Erceg BARFOOT & THOMPSON COMMERCIAL INSITE august 2017 5. 6. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 7. 8. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 PUT US TO WORK ON YOUR NEW FACTORY FLOOR. Commercial 10. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 11. 12. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 13. highbrook We are pleased to announce the opening of our new South Auckland o ces located in the centre of the Highbrook Business Park in East Tamaki. Our prime objective in setting up this new o ce is to be better positioned to service the property investment needs of our wide range of commercial and industrial clients located in this region. We have witnessed and been part of this huge growth over recent years as the Auckland region continues to expand and extend even further southwards. Our designated commercial and industrial agents are both skilled and motivated. They constitute a blend of experience and youth and have evolved into an e ective resultsorientated team. Just completed and located adjacent to our new o ces are the Barfoot & Thompson southern region training and auction rooms o ering state of the art amenities for both its sta and agents. What other commercial agency can provide this level of amenity for its clients and customers in Auckland s southern region If you have any property requirements either sales or leasing of any size please make contact with our o ce. We will assign the most appropriate agent to work with you to develop and implement a successful strategy to satisfy your commercial property needs. new beginnings at our 16. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 17. 18. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 19. 20. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 21. 22. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 23. 24. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 25. 18 Birmingham Road East Tamaki 922 Great South Road Penrose Sales Methodology Auction Client Objective To achieve maximum realisation for the property which was held in a Trust and had four beneficiaries. Property Description A superbly located 602m premises built in the 1970 s comprising a mid stud height warehouse with internal partitioning creating a showroom. The property was returning 53 857 per annum and benefited from a corner site positioning. Campaign Summary Throughout the campaign the property attracted large enquiry from investors and a few owner occupiers. With over 40 enquiries and 18 of these leading to inspections of the property it was seen as a successful four week marketing campaign. Result On the auction day we had eight bidders in the room and one phone bidder. When the property passed reserve there were at least five active bidders still involved. The property was purchased by an investor at 1 211 000 showing a 4.45% yield. Sales Methodology Auction Client Objective To achieve the maximum realisation of a property where the owner used to run their business for 30 years. Property Description A freehold industrial property totalling 482m comprising a mixture of warehouse and o ce. The 1 163m site is located a short distance from the Penrose motorway interchange allowing easy access north and south. Campaign Summary The property attracted the attention of many owner occupiers and investors during the four-week campaign. We had plenty of enquiry and viewings with two pre auction o ers being declined. Result On the auction day there were six bidders in the room and one telephone bidder. The property ultimately sold to an owner occupier for 1 302 000 which was 2 701 m for land and building or 5.38% on a market rent of 70 000 plus GST per annum. 26. BARFOOT & THOMPSON COMMERCIAL INSITE august 2017 6 Canaveral Drive Albany 7 Burns Street Grey LYnn Sales Methodology Expressions of Interest Client Objective To re-position and successfully lease a large industrial premises which had been on the market for a significant time period. Property Description A superbly located 3 473m premises built in 2005 comprising a clear span high stud warehouse with well presented o ce and showroom facilities. It further benefited from generous car parking and yard areas. The property was vacant with an asking rental of 450 000 per annum. Campaign Summary The campaign was structured around the new vendor s flexibility and willingness to cater for new tenants realistic needs. Throughout the campaign the property attracted good enquiry from tenants in the immediate area and greater Auckland. The nature of the enquiry varied in scale and use. Result Within six weeks from re-launching the campaign two long term leases had been secured with multinational companies. This will return a premium over leasing the premises to a single tenant. Sales Methodology Tender Client Objective To achieve maximum sale price for this vacant City Fringe o ce warehouse. Property Description A vacant two level o ce warehouse building of 1 185m floor area constructed in the mid 1970 s on a Mixed Use zoned freehold corner site of 1 106m . The property also benefits from 22 car parks and convenient access to Auckland s CBD and major transport routes. Campaign Summary The four week marketing campaign attracted strong enquiry from 68 interested parties and tendered o ers from nine. Result The property was sold unconditionally to an owner occupier for 5 150 000 plus GST (if any). BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 27. 28. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 29. 30. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 31. WE DELIVER ON OUR PREMISES Commercial BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 33. 34. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 35. 36. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 37. 38. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 39. 40. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 41. 42. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 43. 44. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 45. THINKING OUTSIDE THE CUBICLE Commercial BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 47. 48. BARFOOT & THOMPSON COMMERCIAL INSITE AUGUST 2017 Acknowledged as industry leaders Barfoot & Thompson is committed to being the best real estate agency around. We re thrilled to be recognised for providing our clients with outstanding service and results by winning coveted industry awards. ASIA PACIFIC PROPERTY AWARDS Best Real Estate Agency Asia Pacific - 2016 17 Best Real Estate Agency New Zealand - 4 years running Best Lettings Agency Asia Pacific - 2016 17 Best Lettings Agency New Zealand - 3 years running Best Real Estate Agency Marketing New Zealand 2017 2018 AWARD WINNING WEBSITE Best Real Estate Agency Website New Zealand 2017 2018 Asia Pacific Property Awards Global Winner Best Mobile Website 2016 Leading Real Estate Companies of the World REINZ LARGE AGENCY OF THE YEAR ALL DISCIPLINES 2016 Recognised as New Zealand s best large real estate agency of the year by the Real Estate Institute of New Zealand. city L3 50 Kitchener Street City Ph. 64 9 358 0989 Fax. 64 9 358 4048 commercial barfoot.co.nz NORTH SHORE 129 Hurstmere Road Takapuna Ph. 64 9 489 3880 Fax. 64 9 489 3884 nscommercial barfoot.co.nz SOUTH AUCKLAND Building 5 Highbrook Business Park 60 Highbrook Drive East Tamaki Ph. 64 9 263 8412 Fax. 64 9 263 8419 sacommercial barfoot.co.nz property management L1 4 Morgan Street Newmarket Ph. 64 9 306 2088 Fax. 64 9 306 2089 pmcommercial barfoot.co.nz LOCAL SPECIALISTS Pukekohe 64 9 238 7019 Whangaparaoa 64 9 424 6111 Whangarei 64 9 438 3079