Ōtaki property sold with above 7-percent yield
172 Main Highway, Ōtaki
• Standalone, freehold 287sqm commercial building on 322sqm land along Ōtaki’s main retail strip
• Tenant Kathmandu has occupied the property for 10 years, and has three years to run on its current lease
• Contemporary building, constructed in the late-1980s and extensively upgraded in 2007
• Seismic rating of 70% NBS
• Returns net income of $71,887 plus GST and outgoings
• National Total Property marketing campaign – for sale by auction
• Strong enquiry levels from investors on Bayleys’ databases and directly off the Total Property magazine
• Enquiry came from all around New Zealand
• Three registered bidders, with two in the room on auction day
• SOLD for $940,000 at a 7.6 percent yield
• Purchased by a Wellington-based investor
Ōtaki on the Kapiti Coast has garnered a loyal following as an outlet shopping destination, with some of New Zealand’s major brands represented along the main retail strip.
Fraser Press and Paul Adams of Bayleys Wellington recently marketed the property at 172 Main Highway, which has been occupied by outdoor clothing and equipment brand Kathmandu for 10 years, taking it through a comprehensive Total Property auction campaign.
The Bayleys’ auction took place almost a year to the day that New Zealand went into its first COVID-19 lockdown.
Press said despite the retail sector’s challenges in the wake of pandemic disruptions, there was considerable interest in the Kathmandu-tenanted property as nationwide, investors continue to chase yields.
“This property is one of the best-looking buildings in the town with its modern clean, lines and extensive glass frontage to the highway, and occupies a high-profile location diagonally-opposite New World and Mobil.
“Undoubtedly, the strength of the Kathmandu brand helped underpin the credentials of the property, but the building is timeless and flexible enough to adapt to other retail uses in the future.
“There’s been significant investment in the town lately, such as the redevelopment of the former Caltex site on the main road into the Ōtaki Yard artisan market and initiatives such as this help keep Ōtaki relevant and underpin investor confidence in the town.”
Press said the well-documented population drift north from Wellington continues as buyers chase home affordability, with Ōtaki gaining traction given the under-one-hour travel time to the Wellington CBD.
The vendors, South Wairarapa farmers Felicity and Arthur Warren, purchased the property 10 years ago via Bayleys.
Proof that real estate is a relationship business is demonstrated by the fact that the Warrens, who bought the property through Fraser Press in 2011, opted to sell with him a decade down the track.
Felicity Warren said they were kept well informed from the moment the listing was signed, through until auction day.
“We found Fraser to be open and transparent, giving us an accurate assessment of possible handbrakes in finding a potential purchaser which was admirably countered by the way he and the team drummed up interest in the property.
“This, along with good advertising on social media as well as traditional means, meant the property got good exposure.”
The Warrens admit to being somewhat unsure of how the market would respond to the offering, given the general downturn in the retail sector due to online shopping trends and the fact that in Ōtaki, planned roading changes will divert traffic away from the main shopping area.
“Thanks to Fraser’s feedback throughout the marketing campaign, we felt well prepared for the auction and the result on the day was exactly in line with our thinking”.
Read more customer stories
Subscribe to receive the latest commercial news and insights from Bayleys Total Property