Best winter on record for Colliers International city fringe investment sales team
A record volume of commercial property sales in Auckland’s city fringe over winter indicates the ongoing strength of the market, says Colliers International’s Auckland Investment Sales Director.
Gareth Fraser says the winter period is usually subdued, with a lull in new listings and sales due to many clients and customers being away.
However, this winter was the best on record for Colliers International’s city fringe Investment Sales team.
“There’s been a real surge in activity this winter, which is really unusual in our market,” says Fraser.
“My view is that vendors are seeing we’re near the top of the market, and therefore consider it a great time to take advantage of the market by selling.”
Fraser says buyer demand for top-quality properties, particularly in Auckland’s CBD and city fringe, remains strong.
“We’ve seen strong bidding at auctions and pre-auction as purchasers aggressively pursue properties.
“As a result, some record yields and prices are being set.”
Some notable winter transactions by Colliers International’s Auckland Investment Sales team included:
- 36 Rossmay Terrace, Mt Eden (pictured below) – A vacant industrial premises that attracted multiple pre-auction offers. A furious bidding war on the day saw a sale made under the hammer at a level in excess of $300,000 more than the highest pre-auction offer. The deal was brokered by Jonathan Lynch and Hamish Paterson.
- 52 St Lukes Rd, Mt Albert – This medical centre attracted huge enquiry and pre-auction offers to the extent that it was sold prior to the auction for a yield of 4.48 per cent. This deal was also brokered by Lynch and Paterson.
- 109 Carlton Gore Road, Newmarket – An off-market transaction, sold by a syndicate to a local investor for $28 million, representing a yield of under 7 per cent on passing income. The deal was brokered by Fraser, David Burley and Simon Child.
- 36 Mackelvie Street, Grey Lynn – This property attracted huge interest and was sold pre-auction for $2.9m vacant, such was the demand. The deal was brokered by Charlie Oscroft and Kris Ongley.
- 134 Onehunga Mall, Onehunga – Sold for $1.46m at auction after aggressive bidding, despite seismic and asbestos issues. The deal was brokered by Gawan Bakshi and Ned Gow.
- A confidential off-market transaction over $50m, with a yield in the early 5 per cents.
Fraser says he’s been consistently surprised at the level of enquiry on recent campaigns.
“On the other hand, I’m also aware that a number of properties are remaining unsold at the end of campaigns.
“These appear to be secondary properties, which tend to take longer to sell in the current market conditions.”
Fraser says the biggest shift in the market has been the influx of Australian enquiry.
“There’s a huge amount of demand from Australia, and we’re seeing a tonne of enquiry.
“You’d expect that for the premium CBD stock, but what we’re also seeing is enquiry on mixed-use sites, and I definitely haven’t seen that for a long time.
“It’s also coming from offshore parties in general. In fact, it is the strongest offshore demand I’ve seen in my 20 years in real estate.”
Fraser says demand from local investors is also still really strong.
“Australian enquiry isn’t all translating into transactions yet. I think that will come, whereas the local parties are consistently fronting up.
“Eight or nine times out of 10 at the moment, local purchasers are still actually buying the properties.
“That shows there’s still significant local demand, predominantly from high net worth private investors in the metropolitan market.”
Frasers says the Investment Sales teams in the Auckland CBD, North Shore, West Auckland and South Auckland offices are all having record years.
“This suggests there is a really strong level of activity across the whole Auckland market, and I expect more of the same over the next 12 months, particularly given our low interest rates.
“We’ll see strong enquiry, good quality properties selling really well, and secondary properties taking a little bit longer to sell.”
The Investment Sales team has 16 new on-market campaigns booked so far for the balance of the years and expects to see even more listings.
Among the properties coming to the market in the next month are strip retail in multiple fringe locations, offices, childcare centres, service stations, strata units, bare land and new industrial syndication offerings.
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