Essential service tenant underpinned Taranaki sale

The Property
• Fully-tenanted 1,240qm building with prime frontage and road appeal on State Highway 45
• Offers retail, warehousing, office space and yard area
• 3,054sqm flat site
• Leased to Fonterra Co-Operative Group Ltd
• Returning net income of $117,315pa + GST/OPEX on an eight-year lease, with three years to run and right of renewal
• Seismic rating of 90 percent NBS

Quick Look
• National Total Property marketing campaign – by auction
• Interest generated via Bayleys’ databases and Total Property magazine
• Enquiry from mainly Taranaki and Waikato-based buyers
• SOLD by negotiation post-auction for $1,600,000 at a 7.3 percent yield
• Purchased by a Waikato passive investor

The Story

This substantial land holding in Taranaki’s dairy heartland had everything going for it – an A-grade seismic rating, good profile to busy State Highway 45 and an essential-business trophy tenant Fonterra, trading as Farm Source.

With Auckland going into a strict lockdown at the commencement of the campaign, a key pool of prospective buyers was effectively knocked out of the auction ring leaving Taranaki and Waikato-based buyers with the upper hand.

Willem Brown, Bayleys Cambridge and Iain Taylor, Bayleys Taranaki took the property through an auction campaign, aware that lower enquiry levels were reflective of COVID times.

With instructions from the vendor to sell, the property ultimately sold within four weeks of being passed in at auction.

“The vendors were established, long-term clients of mine in the Waikato and I was delighted to facilitate the sale of their out-of-town investment property with on-the-ground support from my colleague, Iain, in Taranaki,” says Willem.

“That’s the beauty of Bayleys’ mantra ‘Altogether Better’ – relationships can be maintained, and properties sold across regions due to the great network of property specialists and the mutual desire to work hard for all Bayleys’ clients.”

Willem says although buyer enquiry was lower than initially expected because of the restrictions preventing travel out of Auckland, the property’s exceptional tenant credentials and the well-maintained premises made it a covetable opportunity.

“We did expect a higher price to be obtained, but given the limitations, feel it was still a solid outcome for our clients.”

Vendor Comment

Waikato-based vendors Brian and Elsie Croy said despite COVID-related disruptions to the sales’ campaign, a good result was ultimately obtained.

The Opunake property was part of Brian and Elsie’s commercial property portfolio and they’d owned it for five years.

“We wanted to reduce our commercial portfolio to invest in another venture, so we engaged Willem to sell it for us,” said Brian.

“Willem and his assistant, Jane, were outstanding and worked extremely hard under badly-timed COVID conditions to promote and sell the property.”

Brian and Elsie said the Bayleys’ team did everything they could to mitigate the unfortunate timing and the reduced enquiry levels, communicating well and providing market updates.

“While the price we obtained was less than initially indicated, we were realistic,” said Brian.

“Lockdown conditions shut many prospective buyers out as they were not able to inspect the property so on reflection, we did achieve a good result.”

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