|The strength of the Christchurch industrial market is highlighted by the recent sale of a high quality investment at Wigram Close in Sockburn.
The warehouse/office, with a net lettable area of 2230m2, fetched $4 million pre-auction, representing a 6.5% yield.
Industrial specialist broker Christian Kellar said the unconditional offer was received on the first day of advertising.
“In that brief time we received a large number of enquiries because this is exactly the sort of property that investors want – a well known tenant, good location and a modern building. It’s well leased to the Flooring Centre with six years to run on the lease and two rights of renewal of eight years.
“There continues to be a good weight of capital in the market with passive investors showing particular interest in the low to medium price bracket up to $10 million.”
Yields in the 6.5-7% are now common and are being achieved on the back of an imbalance of limited supply, insatiable investor demand, and either low cost borrowing opportunities or meagre returns offered from alternative cash investments.
Kellar said that in industrial leasing, rentals have begun to plateau as the market has become more competitive with increasing availability of existing and new stock.
“Demand is slowing, however, we are still negotiating significant deals such as the recent leasing of 6500m2 at 23 McAlpine St to Fastway Couriers NZ and a lease to RCR Infrastructure, of circa 1600m2 at 92 Treffers Rd.
For further information:
Christian Kellar, 03 365 7887, 027 333 4057, Christian.email@example.com