Split-risk Tauranga light industrial property

The Property
• Fully-tenanted freehold property on a high-profile corner site
• 579.8sqm of circa-1980s’ buildings and sealed yards on 959sqm (more or less)
• Three access points to the property
• Mix of showroom, office and workshop space
• Two longstanding tenants
• Net income $51,131 plus GST and outgoings
• Rateable value $765,000

Quick Look
• National Total Property marketing campaign – for sale by auction
• Strong enquiry levels from investors on Bayleys’ databases and directly off the Total Property magazine
• Enquiry from all over New Zealand
• 84 registrations of interest; multiple bidders on auction day – three on the phone
• SOLD for $1,660,000 – a 3.08 percent yield
• Purchased by a Tauranga-based investor

The Story

A functional light industrial property at the commercial junction of Fifteenth Avenue and Burrows Street in Tauranga was a magnet for investors who packed out the auction room in a hotly-contested bidding war to secure the strategic offering.

Brendon Bradley, Ryan Bradley and Lynn Bradley of Bayleys Tauranga marketed the property for its vendor clients who had owned it for more than 20 years.

Two long-established businesses, The Trellis & Ply Centre and Forklift Services Tauranga Limited, occupy the building, which had some upside given one tenant’s month-to-month lease.

A shortage of comparable stock on the market, and the rateable value of $765,000 drew buyers from far and wide, with seasoned agent Brendon Bradley claiming this auction campaign was one of the best he has ever been involved with.

“It blew us all out of the water, actually,” he said.

“Some prospective buyers didn’t even get a look in, as even the opening bid exceeded their budgets.

“The 3.08 percent yield is what I’d call a ‘Mount Maunganui yield’ and it certainly demonstrates the chase for opportunities in the commercial and industrial sector.”

Bradley said ultimately, the property is strategically-positioned, as Fifteenth Avenue is a key transport arterial that forms part of State Highway 2A between the city centre and Welcome Bay, Maungatapu, Hairini and Ohauiti, and the site has excellent exposure to high daily traffic counts.

Vendor Comment

The property was owned by a local trust and its spokesperson applauded the phenomenal result achieved under the hammer.

Having a property go to auction can often be a daunting prospect, but in a hot market where demand outstrips supply, there can be exciting outcomes.

“In setting the reserve price for the auction, we were guided by buyer feedback and market sales’ data provided by the Bayleys’ team and felt heartened by the interest that was shown in the property and confident that we could achieve a good price,” said the spokesperson.

“We believe the result on auction day reflected the appetite in the market today for well-located commercial and light industrial property and also the potential that this site could hold in the future.

“It is testimony to the Bayleys’ brand that the auction room was full, and the bidders were motivated – we were delighted with the outcome.”

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