A Hawke’s Bay investment property has been sold to an out-of-town investor for $1,900,000 at a yield of 6.0%. The prime 1315m² corner property at 1 Leyland Street, Onekawa is tenanted by international company, BOC Gases, on a substantial ten year lease, providing a steady income stream for the new investor.
Colliers International commercial broker Kerry Geange says that the there was considerable national interest in the property through the Colliers International investment buyer networks from day one. “Within a few days of listing the property, we were dealing with multiple parties with genuine interest in the property from all over the country,” he says.
Geange, who comes from a background in town planning consultancy, says that the strong economy is seeing an increase of investors actively searching for investment opportunities in Hawke’s Bay and that they are seeing particularly strong enquiry from passive investors around New Zealand as well as people re-locating to the region.
“Quality investments such as this one are getting snapped up fast. With a long term lease to a strong international company, great location and an asking price at a popular investment level, Leyland Street is a great addition to any investment portfolio,” he says of the property that was constructed in 2007.
On the back of the increasingly positive Hawke’s Bay economy with influences such as low interest rates, migration, increasing tourism activity, regional events, increasing business and consumer confidence, the green light on the Ruataniwha Dam project and a strong residential property market, there has been a recent shift in the commercial and industrial market with investors prepared to pay for good tenants and lease terms.
Geange says that recent investment property activity has been strong and there has been a noticeable shift in yields over the past six months. While the cost of finance is at a new low and looking to stay that way, and with record yields being achieved for commercial investment property in metropolitan centres, he expects the activity in the local market to continue to stay strong.
“With a wide range of economic factors lining up, we are expecting yields to continue to sharpen. We have another prime investment building coming to the market shortly, $169k per annum on a ten year lease to SBS Bank in Hastings. On the back of the sale of 1 Leyland Street, we are expecting to see significant interest as the regional investment market continues to change.”