Little Lush lands biggest bid at auction

5:00 AM Saturday March 14, 2015 Colin Taylor

Occupied by Lush in Landmark House at 187-189 Queen St, the smallest property for sale fetched the highest auction price of $3,230,000.

The smallest property for sale at Bayley’s first Greater Auckland auction of the year fetched the highest sale price of $3,230,000.

The property was one of many across all sectors of the commercial and industrial market that generated strong bidding competition at the auction with 19 properties selling for in excess of $18.3 million.

The 56 sq m unit, on the ground floor of heritage building Landmark House at 187-189 Queen Street, CBD also sold at the lowest yield of just 4.95 per cent on its net annual rental income of $160,000.

The unit has been occupied since 2000 by global handmade cosmetics manufacturer and retailer Lush which has over 800 stores, including nine in New Zealand. In November last year Lush signed up for a six year extension to its lease which has two-yearly rent reviews to the Consumer Price Index (CPI) plus 1.5 per cent.

Alan Haydock, who marketed the property with Bayleys Auckland colleagues James Chan and Damien Bullick, says bidding on the property started at $2.4 million with multiple bidders quickly taking it through to $3.2 million when it was declared on the market with the yield sitting at five per cent.  

“Despite the strong market that we are currently experiencing, it is still unusual for a property to sell at a yield of less than a five per cent and in this case reflected the property’s exceptional location with frontage onto Queen Street in one of its highest pedestrian count areas. Other factors that appealed to investors were built in rental growth ahead of inflation and the strength of the multinational tenant.”

Also in Landmark House, on theground floor, a 117 sq m tenancy with extensive frontage to Durham Street West and occupied by Chinese restaurant BBQ King, sold at a 5.62 per cent yield through Haydock, Chan, Bullick and Quinn Ngo of Bayleys Auckland. The restaurant has been in occupation since 2002 and is four years into a 12 year lease. Bidding on this property began at $1.2 million and it was declared on the market at $1,530,000. Spirited competition continued, with bids increasing in multiples of just $1000 at various stages, until the hammer finally came down at $1,610,000. 

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At 344 Great North Road, Henderson, this premises housing a TAB in a strip retail block of shops sold for $900,000.

The property that attracted the most bidding was a commercially zoned corner site in Pokeno, south of Auckland, and close to the new Chinese Yashili dairy plant. The 837 sq m property, with two tenanted houses generates annual holding income of $29,640 gross and was sold for $735,000 by Graeme Moore and Tony Chaudhary of Bayleys Manukau Counties.

Moore says the property is located close to a new business park that is anchored by the $200 million dairy factory and this has made Pokeno a sought after investment location.

Bidding for the site at 68 Great South Rd, started at $500,000 and the property was declared on the market at $700,000. A further 17 bids then followed, many involving $1000 increases, before it finally sold.

John Church, Bayleys national director commercial, says all the properties that sold at the Greater Auckland portfolio auction attracted multiple bids and there was also good competition on a number of the 11 properties that were passed in, with one selling post auction and others having contracts or offers on them.

“There continues to be a lot of unsatisfied demand in the market which is a good sign that we have another very active year in store for us in the commercial and industrial property sector,” says Church. “The unsuccessful bidders are likely to look for other opportunities. We are also expecting to see increasing numbers of investors bidding on more than one property at auctions to increase their chance of success and there was evidence of that at the Greater Auckland auction.”

Two retail properties in Henderson also sold at the auction. A 940 sq m bulk retail outlet at 424 Great North Rd, Henderson, occupied by Waitemata Backcare Beds on a six year lease from December 2013 sold for $1,295,000 at a 9.58 per cent yield through Ngo, Owen Ding and Chan and Tony Chaudhary of Bayleys Manukau.

Bidding on this property, on a high profile 854 sq m corner site, started at $1 million and it was declared on the market at $1.2 million. Close to $100,000 worth of further bids followed, with a series of $5000 increments from $1,260,000 on.

Nearby at 344 Great North Road, Henderson, a 158 sq m TAB premises in a strip retail block of shops sold for $900,000 at a 6.66 per cent yield through Chan and Matt Lee, Bayleys Auckland. The property has been tenanted since 1999 by the New Zealand Racing Board with the current six year lease running to October 2017. It also has a site-specific licence for nine gaming slot machines.

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This bulk retail outlet at 424 Great North Rd, Henderson, occupied by Waitemata Backcare Beds sold for $1,295,000.

At 357 East Tamaki Rd, East Tamaki, three Business 5 zoned sites with a variety of buildings on a nine lot subdivision sold under the hammer at the Greater Auckland auction through John Bolton, Simon Andrews and Katie Wu of Bayleys Manukau for a total value of $2,405,000.

Lot 1, a road frontage 1982 sq m site was purchased for $865,000 by an owner occupier while Lot 2, a second road frontage site of 298 sq m, sold for $700,000 to an add value investor. The third site, Lot 9, a rear 2929 sq m site with two existing buildings - one with a large yard - was purchased by another owner occupier for $900,000.

Bolton says the 3.412 ha site on which the lots are located is one of the last remaining large blocks of industrial land in East Tamaki with two other larger lots having sold prior to the auction through Bolton and Roy Rudolph of Bayleys Manukau for close to $4 million.

The property has been occupied by Downer EDI Works Limited, which is relocating to a new purpose built facility in Kerrs Rd, East Tamaki.

Gaze Property Partnerships is undertaking the subdivision plan with titles to the individual lots expected to be issued in the second quarter of 2015. Andrews says the subdivision has been designed to make the best use of existing buildings as well as the property’s ample yard and parking areas with buildings covering less than 20 percent of the site.


Smaller retail units sold at the auction included:

  • A 292sq m two-level building on a 151sq m site at 25-27, Mayfair Place in the main retail strip of Glenn Innes sold shortly after auction for $570,000 through Quinn Ngo and Owen Ding. Two ground floor retail tenants are on leases running until 2016 and 2017 producing $42,000 net a year while the upstairs office space is vacant.
  • A single-level retail premises on a 149 sq m, site at 172 Queen St in Panmure’s main retail strip was marketed by Chaudhary, Jana Darj and Amy Weng of Bayleys Manukau and sold prior to auction for $540,000 at a 6.66 per cent yield. It is occupied by a superette and Lotto outlet on a four year lease from December 2012, with three four-year rights of renewal.
  • A 248 sq m single level retail premises on a 706 sq m site 14-18 Gorge St, Tuakau, sold for $560,000 at a 7.2 per cent yield through Shane Snijder of Bayleys Counties. It has three well established tenants - a dairy, fish shop and hairdresser.


Smaller industrial units to sell included:

  • A 284 sq m warehouse and office unit with eight car parks at 6B Henderson Place, Onehunga, which sold for $490,000 at a 7.35 per cent yield through James Hill and James Valintine of Bayleys Auckland. An established tenant has recently renewed for three years.
  • A 120 sq m two level unit and three car parks in St Lukes Business Park sold for $490,000 at a 7.14 per cent yield through Leah La Hood and Kate Kirby of Bayleys Auckland.  The unit is occupied by boutique chocolate company, Colestown Chocolate, on a four year lease from August 2010.
  • A 230 sq m warehouse and 116 sq m office unit at 27 Waipareira Avenue, Henderson, and occupied by NZ Post which has just renewed its lease for three years, sold for $467,500 at a 7.48 per cent yield through Laurie Bell and  Mike Adams, of Bayleys Auckland.
  • 171 sq m tilt slab industrial unit at 13 Beatrice Tinsley Crescent, Albany,with high stud warehousing plus two levels of office and showroom and three car parks sold vacant for $416,000 through James Kidd and Matt Mimmack of Bayleys North Shore Commercial.


■ Other Bayleys Greater Auckland sales are included Recent Deals



Alan Haydock of Bayleys (left), and John Church, Bayleys National director (right).