Newton Street in motion
126 Newton Street, Mount Maunganui
- 1,330sqm, two level industrial property
- Showroom/warehouse/office unit to the road frontage with three further warehouse/office units behind
- 2,194sqm freehold industrial-zoned land
- Fully-leased to four tenants with income of $168,416.00 + GST and outgoings
- 18 on site car parks
- CV: $1,930,000
- First time on the market since built in early-1990s
- Close to the port and arterials
- National Total Property marketing campaign with auction sale method
- Strong enquiry levels from mainly local Bay of Plenty buyers, with interest also coming from the Waikato
- Three registered bidders in the auction room, with two of them actively bidding
- SOLD under the hammer for $3,650,000 at a 4.61% yield
- Purchased by former Waikato farmers, now living in the Bay of Plenty
The address and the tenant covenant are what ultimately sold this property, according to Graeme Coleman of Bayleys Tauranga.
Sure, he put in the hard yards and ran a tight auction campaign – fielding plenty of interest in the lead up to auction day – but Graeme says properties that come up for sale on the open market in Newton Street don’t hang around for long, especially when leases are locked in.
“This is arguably the best industrial street in Mount Maunganui and I knew the phones would be busy when this one was listed,” he says.
“Certainly the fact that it was a good size and fully-leased was a real drawcard, too.
“Today investors are actively chasing location and reliable income so with four tenancies splitting the risk, this property was a very appealing proposition.”
The location works well for a broad mix of tenants and the showroom business, European Ceramic Tiles & Carpet, was a foundation tenant from 1994.
Graeme says the purchasers are passive investors with a farming background, which is a market segment that is increasingly seeing value in commercial property investment.
“Investors are chasing yields that give them better bang for their buck than the trading banks can offer,” he says.
“Given recent market activity, I had thought that this property would perhaps realise a 5-5.5% yield but the market told us otherwise and at a 4.61% yield, the vendor was very happy.”
Vendor Lynne Bennett says the auction got quite exciting – even if she wasn’t there in person to see it unfold….
Lynne’s late-husband, Allan, built the Newton Street property around 25 years ago and daughter Anna has property managed it in recent years.
So it was somewhat bitter-sweet to see the property – which has such strong family connections – being sold.
“We always managed it ourselves and always found it easy to get tenants as the location is just so good,” says Lynne.
“However, we wanted to free up some capital to allow us to do some work on another building and the time seemed right to sell.”
Lynne had no qualms with an auction campaign for the property, having bought her home by auction and having confidence in agent Graeme – her cousin – to get the best result.
“What I didn’t expect, though, was to be in hospital with complications from a knee operation on auction day,” she laughs.
“But I was very happy with the price – I wouldn’t have sold it if I wasn’t – and actually, it was really exciting listening to the auction on the phone.”
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