Portfolio reflects high demand market

"Investor demand remains strong and this quarter has ended positively with our concluding a record number of transactions and many larger sales," Urlich says.

Prefacing Barfoot & Thompson Commercial’s first 2016 Insite portfolio publication he says the tax effectiveness and assured gains from 'bricks and mortar' continue to out-perform the low returns from traditional bank accounts.

Urlich says the new portfolio contains 29 properties throughout Auckland and includes offerings in Whangarei District, Paeroa and Warkworth.

"It offers a wide array of opportunities for investors, developers and tenants with 13 properties for sale and seven for lease. Five development sites in Auckland central, New Lynn, Glen Eden, Takanini and the Whangarei District are also featured in the portfolio.

"Three of the properties are being sold by tender, four are going to auction and two are being sold by deadline private treaty."

Urlich says the supply of available listings remains tight and the strain on the leasing market is not dissimilar, with low vacancy rates a consequence of the lack of available stock.

Auckland’s property markets have continued to strengthen

"Auckland’s property markets have continued to strengthen over the last 12 months. Investor demand for stock continues to outstrip supply and, combined with low interest rates, has created downward pressure on yields.

"Vacancies for industrial property right throughout the Auckland region are at all times lows, putting pressure on rentals, incentive levels and land prices."

Urlich notes that the volume of sales during 2015 was down from a peak in 2014 but continued to exceed the long term average.

"The volume of sales was limited by a lack of stock rather than investor demand or access to credit," says. "However, the challenge associated with sourcing sufficient good quality property investments in Auckland has increased investor interest in Wellington and in the provincial centres."

Urlich says the retail market has "an interesting dynamic" with retailers competing strongly against each other for market share in traditional shopping centres as well as on Main Street.

"Demand for retail space has been mixed over the last year with vacancy rates falling in some locations while others experienced an increase." 

He says the industrial market has continued to go from strength to strength with demand from occupiers similarly continuing to push down vacancy rates and good quality vacant stock becoming increasingly difficult to find.

Prime rents have started to increase

"As a result, prime rents have started to increase and are rapidly approaching levels experienced at the peak of the 2007/2008 cycle. Land values have continued to increase and development sites costs are $350 to $400 per square metre in established areas with the demand for new modern premises continuing to be unsatisfied."

Urlich expects Auckland’s economy will continue to grow and out-perform the national growth rate. "Population growth in excess of three per cent per annum, increased construction activity, growth in tourist arrivals, and low interest rates all support the continued expansion of the local economy. The growth in Auckland’s economy will continue to drive growth in commercial and industrial property markets."

427 - 429 Titirangi Rd

A highlight Auckland property in Barfoot & Thompson Commercial new portfolio is a prominent retail and office property at 427-429 Titirangi Rd in the western suburbs. 

"This Titirangi Village landmark property is for sale for the first time since its original construction in 1965," says Murray Tomlinson, commercial and metro broker, who is marketing it for sale by auction at 10am on Thursday April 28 at the agency’s 34 Shortland St auction room in Auckland City.

Tomlinson says the building on a freehold 2894sq m site in two titles encompasses a ground floor SuperValue supermarket of 479.2sq m and first floor commercial/retail suites of about 180sq m leased by a dentist and DeMop hairdresser.

The SuperValue lease runs through to March 31, 2021 and has two six-year rights of renewal. DeMop’s and the dentist are on medium term leases having been in occupation for well over 10 years.

The Waitakere Ranges property, being sold by a family trust, is generating total annual rent of $177,152 per annum net plus GST and comes with 27 car parks.

"Titirangi Village is absolutely unique in the greater Auckland City, being something akin to mini retail oasis in the midst of the bush clad Waitakere Ranges," Tomlinson says. 

"The village draws customers from the immediate surrounding affluent suburbs of French and Wood Bays, North and South Titirangi and Waima and is also something of a destination location for day-tripping Aucklanders. 

"The village is an essential community and retail hub that is seemingly safe in the knowledge that further commercial development opportunities in the area are practically non-existent."

Tomlinson says a special feature of most commercial Titirangi properties, with this one being no different, is that about half the site is developed while half remains as native bush within a specific zoning designated Bush Living. The Proposed Auckland Unitary Plan (PAUP) further recognises the significance of the native bush areas with a Significant Ecological Area overlay.

"Split risk income, long term occupiers, having the only supermarket in the vicinity, offered at an ideal price point - this is an absolute gem of a property," Tomlinson says.

967 Beach Rd, Torbay

Across the Harbour Bridge in Torbay on the North Shore, another high profile retail property is featured in the new Insite portfolio. The four shop retail block is due to go under the hammer at the same April 28 auction at Barfoot &Thompson’s Shortland St auction room but half an hour later at 10.30am.

"This property on the corner of Beach Rd and Toroa St, at the gateway to the Torbay shopping precinct, has been held by the present owners for many years and has had very few vacancies in that time," says Bruce Jiao who is marketing 967 Beach Rd with colleague Gary Seekup.

The four retail tenancies, generating annual net rental income of $105,061 plus GST, occupy a building with a net lettable area of about 410sq m on a 629sq m parcel of freehold Business 2 zoned land.

Under the PAUP the land is zoned Local Centre – Torbay which is designed to provide for the local convenience needs of surrounding residential areas. "Of note is that the proposed future zoning also permits buildings up to three storeys or 12.5 metres in height enabling residential usage in the upper floors," Jiao says.

Seekup says Beach Rd is the main street running through Torbay and the retail centre has ample off-street parking for its customers.

"The land is rectangular in shape, elevated and level with around 29 metres of frontage onto Beach Rd and about 22 metres onto Toroa Rd.

"In summary this is a compact established shopping centre servicing a surrounding relatively well-off population base," he says.

"Torbay is surrounded by a large established residential catchment which is being substantially enhanced by the development of a major subdivision to the north.

"Properties within smaller suburban shopping precincts in established residential catchments make excellent investments," Seekup says.

Unit A, 75 Anzac Avenue

Back "over the bridge" in Auckland city, a large freehold strata-titled ground floor unit is for sale subdivided into three separate self-contained retail shops.

Agnes Teh, who is marketing Unit A, 75 Anzac Avenue, for sale by deadline private treaty closing at 4pm on April 27, says the three shops have areas of 178sq m, 142sq m and 222sq m to total 542sq m. The rectangular shaped site has a frontage to Anzac Ave of 15.24 metres and comes with six tandem car spaces that have rear access from Eden Crescent.

The land is zoned Strategic Management Area 5 under the Auckland Council's District Plan but City Centre under the PAUP which seeks to ensure the city centre is an international centre for business and learning, innovation, entertainment, culture and urban living.

"Each tenancy has its own toilet with amenities for the disabled, kitchenette, alarm system and three phase power," Teh says. "And it is within walking distance of Queen St, Britomart and the University of Auckland."