Colliers International’s commercial property auctions continue to be a powerful approach for North Shore owners in 2016 with a 100% clearance rate in the retail and industrial sectors.
The latest property to go under the hammer and retain the award-winning streak of auction results for Colliers was 93 C Ellice Road , Wairau Valley. A tenanted investment returning $48,000pa.
The property was in hot demand with a frenzy of bids reaching a final price of $1,110,000 with an initial yield of 4.32%. This is comparable to other properties brought to auction by Colliers in recent months. These include 13 Williamson Ave, 7 D Douglass Alexander Parade and 11 Volkner Place, which sold below $5 million with yields ranging between 4.78% and 5.2%.
North Shore office general manager Jimmy O’Brian says North Shore commercial property sector is experiencing strong tenant demand, rental growth and capital appreciation - key fundamentals in the property sector that are driving the record levels of bidding activity.
“Showcasing this strong tenant demand is the latest Colliers International surveys with the office, industrial and retail vacancy rates at 4%, 2% and 3% respectively.
“Other recent auction results include 8 G Piermark Place, 106 Rosedale Road and 8 retail units at 252 Oteha Valley Road in Albany. Many properties are selling above vendor expectations, highlighting how strong investment conditions currently are.”
Enabling auction attendees to bid higher has been the relative spread between borrowing costs and property yields. There is currently a 140 to 300 basis point spread between debt costs and yields for most property, which is an attractive position for any North Shore, New Zealand or offshore purchaser.
“Strong auction results is a trend forecast to continue, according to the latest investor research from Colliers International. The ‘lower for longer’ inflation and interest rate environment, the weight of money chasing limited prime stock and the positive economic and property fundamentals, signals further yield firming, rising rents and asset appreciation.”
John Bowring, Colliers International auctioneer, believes auction is the best way to sell commercial property in the current market because it puts a set sale date around that property.
“Commercial real estate auctions continue to grow throughout New Zealand as vendors realise that getting a fair market value for their property is what it's all about. Buyers, on the other hand, like to be able to see their competition and enjoy the transparency that auctions offer.
“A great auction is made by getting a lot of buyers in the room and in the current market we’re getting a lot of buyers coming to properties.”