Te Kuiti property bought sight-unseen

The Property
• 1,270sqm single-level buildings on 3,963sqm freehold land
• Comprising retail, office and warehouse space, with drive-through access to secure yard
• Occupied by PGG Wrightson Limited
• Current six-year lease, with 1x3-year right of renewal
• Net income $91,703 per annum + GST and OPEX
• Zoned Commercial 8A under the Waitomo District Council plan

Quick Look
• National Total Property marketing campaign – by auction
• Interest generated via Bayleys’ databases and Total Property magazine
• More than 30 enquiries, mainly from Auckland and the Waikato
• Seven phone bidders om the day
• Acceptable pre-auction offer made and on the auction day, this was the successful bid
• SOLD for $1,900,000 at a 4.8% yield
• Purchased by a Waikato investor to add to an existing property portfolio

The Story

As investors around New Zealand continue to chase robust returns in the commercial sector, a well-performing and fully-tenanted property in the rural service town of Te Kuiti in the Waikato got a big-city result when it went to auction.

Occupying a generous 3,963sqm freehold site, the building at 57 Rora Street has been strengthened to above 67 percent new building standard and has benefited from various upgraded capital works by the landlord.

NZX-listed farming supplies and advisory firm, PGG Wrightson Limited has occupied this site with its retail premises, stock agency, real estate and insurance offices for more than 20 years and, reflecting its commitment to the town, recently extended its lease term and added a further right-of-renewal.

Josh Smith, Bayleys Waikato, says recent sales in the area had confirmed that the market for well-tenanted, pivotally-located properties was going great guns, with investors clamouring for opportunities.

“I approached the owners of this property outlining the results we’d been achieving, and the pent-up demand we were seeing from prospective buyers.

“The campaign, while not without its COVID-related challenges, proved our assertions and the 4.8 percent yield that the property realised was an exceptional result for a regional property.”

Josh says the property was purchased sight-unseen due to Waikato lockdown restrictions.

Vendor Comment

The group that owned the Rora Street property say their initial expectations of the property’s market value were exceeded on auction day.

Having owned the property for around four years, the group was initially reluctant to sell as the property had strong returns and had an excellent tenant in place.

“However, buoyant market conditions and advice from Josh suggested that our group could get a premium if we listed the property for sale due to the qualified buyer interest he had,” they explain.

The Total Property marketing campaign experienced a blip when the Delta outbreak spread to the Waikato with elevated alert levels halting in-person property viewings.

“We had initial concerns about how the campaign would go given these restrictions, however Josh was communicative during the lockdown period and provided suitable advice as we moved through the alert levels.

“As the auction date neared and negotiations were coming to a head, Josh gave us solid guidance and we were comfortable to proceed with the online auction.

“Ultimately, both the level of enquiry generated and the winning bid on auction day exceeded our expectations – we were thoroughly impressed with Josh and his team throughout the whole sale process.”

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