Underlying land value strengthens Papakura offering

The Property
• Freehold 1,320sqm land, with 20-room rest home and amenities
• Operating as Janelle Rest Home and licensed for 21 residents
• New 10-year lease with 3 x 10-year rights of renewal
• Full net lease, returning $110,000 + GST and outgoings, with reviews to CPI every two years
• Zoned Residential – Mixed Housing Urban

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
• Mainly local interest
• Five bidders on auction day with auction conducted online
• SOLD for $2,351,000 at a 4.67% yield
• Purchased by a local investor

The Story

The sale of a well-returning passive investment property on a large site in Papakura, just 700 metres from the town centre, showed the importance of having knowledgeable local agents who can pivot quickly when circumstances change.

The property, which supports a popular family-style rest home, is located within an established residential neighbourhood and has Residential – Mixed Housing Urban zoning giving it potential redevelopment options in the long-term.

Piyush Kumar and Peter Migounoff of Bayleys Papakura planned an auction campaign, with the marketing kicking off in early August – pre- the nationwide COVID/Delta lockdown.

With vulnerable residents in the rest home, no further viewings were permitted once lockdown was announced.

“After pushing the auction date out, we proceeded with an online auction because the buyer interest was so strong, and some inspections had been made prior to lockdown,” said Piyush.

“Most bidders on the day had not been able to inspect the interior, and the successful buyer bought it without seeing inside.

“Prospective buyers felt confident to bid based on the demonstrated income and the underlying land value.”

While the lockdown conditions were not ideal, the result achieved was beyond expectation and had added significance for Piyush.

“Other agencies had tried to sell the total going-concern package without success, selling just the business component before the owner called Bayleys in.

“Our marketing of the land and buildings drew interested investors out of the woodwork, and we were delighted to achieve such a great outcome for our client, John.”

Vendor Comment

Vendor John Cai is full of praise for the Bayleys sales’ team, saying their communication and efforts were great throughout the campaign when lockdowns played havoc with timeframes.

John Cai bought the property as a going-concern in 2017 and initially he and his wife, a registered nurse, operated the rest home, before selling the business component early last year.

It was the full package of land, buildings and business in an expanding catchment area that attracted him four years ago, however, a change in direction ultimately prompted the sale of the property.

“Papakura is seeing some exciting growth and this property represented a good opportunity for a new owner,” said John.

With the auction campaign disrupted because of Auckland’s lockdowns, John said Piyush and Peter diligently liaised with him and kept him updated on buyer enquiry and interest, which was not an easy task given the alert level uncertainty and the fact that no property viewings were allowed.

“However, the price achieved through the online auction was much better than I expected – Bayleys did a great job!”.

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