Seven out of eight standalone properties put up for sale in a light industrial complex at Sockburn have sold under the hammer at a total value of $6.355 million at a Bayleys Total Property auction in Christchurch.
Located on the corner of Paragon Place and Waterloo Road, the portfolio contained a range of fully leased offerings on separate titles on a total land holding of 9,360m² in the heart of Christchurch’s western industrial belt.
Marketed by Campbell Taylor, senior agency director and Craig Edwards, investment sales director, for Bayleys Canterbury on behalf of long standing private family owners, the properties achieved prices of $550,000 to $1,240,000. Most sold at yields of 6.4-6.6%.
“The vendor was prepared to consider unconditional offers for the portfolio as a whole prior to auction but it was decided that the best result would be achieved by auctioning the properties individually,” said Campbell Taylor
“Six of the properties that sold offered a high standard of light industrial accommodation on Paragon Place mostly developed in the mid 1990s and mid 2000s which underwent seismic strengthening and some further refurbishment following the Christchurch earthquakes. The other sale was of a prime corner site in three titles on Waterloo Road which presents a substantial development or value add opportunity for the new owner.”
Mr Taylor said while most of the properties have current leases expiring by 2020, they have renewal options and are located in a highly successful development with a well-established reputation for historically low vacancy levels.
Craig Edwards said the auction generated strong interest in a Christchurch commercial property market that has been constrained by a limited supply of quality investment offerings this year.
“There was a pleasing response from investors with a good spread of bidding across the offerings – two properties were purchased by the same buyer with the others each bought by different parties. There was also a big turn out from the valuation fraternity who have been struggling to get much of a fix on the market this year because of the low volume of comparative sales activity.”
The properties to sell were:
3 Paragon Place: 412m² warehouse, office building developed in the mid 2000s on a 787m² site with street frontage of more than 50m sold for $780,000 at a 6.66% yield. It is occupied by NZ Car Canterbury as their compliance facility, with a current lease expiring in June 2019, with one four-year right of renewal.
4 Paragon Place: 1,621m² site on the corner with Waterloo Road, in two titles, occupied by vehicle dealer NZ Car Canterbury, sold for $1,240,000 at a 7.04% yield. There is also 526m² of high stud showroom space and ancillary offices, amenities, workshop and mezzanine storage. This lease also expires June 2019 with one four-year right of renewal.
6 Paragon Place: 521m² warehouse and office building on an 803m² site sold for $925,000 at a 6.43% yield. Leased to HVAC supplier and servicer AMT Mechanical Services until March 2020, with one three-year right of renewal.
7 Paragon Place: 413m² stand-alone warehouse building with a substantial food grade fitout installed by the tenant on a 784m² site sold for $760,000 at a 6.38% yield. Leased to a manufacturer and exporter of nutritional powdered dairy products until January 2023, with one five-year right of renewal.
8 Paragon Place: 267m² single-level warehouse, showroom and office building on a 500m² site sold for $550,000 at a 6.54% yield. Leased to global property services company Cushman & Wakefield until June 2020 one three-year right of renewal.
12 Paragon Place: 637m² warehouse and office building on a 1,086m² site sold for $970,000 at a 6.41% yield. Engineering fabricator Action Automatic Manufacturing has been in occupation for over 20 years with a current lease until November 2019 plus one three-year right of renewal.
26-32 Waterloo Road: 2,864m² land holding in three titles, used for vehicle display, sold for $1,110,000, or $388/m², at a 4.55% yield. Current lease to NZ Car Canterbury, which also occupies surrounding properties (3 and 4 Paragon Place), expires at the end of June next year with no further rights of renewal.
The only property to pass in was a 547m² warehouse and office building on a 915m² site at 10 Paragon Place where Topcoat Specialist Coatings (South Island) Ltd has taken an assignment of a five- year lease until 2020, with a further five year right of renewal. Craig Edwards said negotiations were continuing with a number of interested parties on this property.