| Investment Property Snapshot |
| What: 140 sqm retail space in a character building opposite Auckland Art Gallery. |
| Where: Units B & C, 28-36 Wellesley St, Auckland CBD. |
| Sold for: $1.25 million |
| Net rental yield: 5.44% |
The area around the corner of Kitchener and Wellesley Streets in Auckland's CBD is known as the arts precinct, with Auckland Art Gallery, a sprinkling of dealer galleries, Auckland Public Library and several performance venues all nearby.
But it's also an area that's undergone some significant changes with many of its retail premises catering to students at the nearby universities and a younger Asian crowd.
That all makes for a pretty vibrant mix and the
Although its street address was Wellesley St, it was located at the back of the building, on the corner of Kitchener St and Khartoum Place which runs between Kitchener and Lorne Streets and was directly across the road from Auckland Art Gallery and Albert Park.
On the ground floor of a character building with upmarket apartments on the upper floors, it was
It was returning $68,000 a year in net rental income.
Gow said although the property had a lot going for it, the fact it was in an older building with relatively high operating expenses would have weighed on the minds of some investors, although it appealed to a wide range of potential buyers.
Some were keen on the idea of converting it into an apartment, others were so-called mum and dad investors who had been turned off residential investment property by the high prices and low rental yields in Auckland. There were also mainstream commercial property investors.
In the end it was purchased for $1.25 million by an overseas investor who had other interests associated with the art scene.
At that price the new owner will receive a net rental yield of 5.44%.
Check out our Commercial Property Sales page for details of other commercial sales from around the country.
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19 Comments
Agree Greg and you're right... However, but call me old fashioned, if you are borrowing money, given the current economic weather and local borrowing rates, that yield would seem pretty tight to me if the money was being borrowed from a local bank.. If it is a geared purchase, it only makes sense if the funds are being appropriated at much lower interest rates abroad. Do you know where the local buyers got to on price before being outbid? 20-25% less would be my view if relying on local funding? And even if you were paying cash you're still not going to anywhere near that price.
What...you're sorely mistaken about what Khartoum Place is now.
Gone is the long-standing Tony's Steakhouse, replaced by a Korean restaurant, next to the Mentatz Japanese ramen house. Across the square is a Gloria Jeans chain cafe, next to a Thai restaurant, next to a Gong Cha milk tea store.
The previous crowds in Khartoum Place have long been replaced. It's not a hipster place, though it is a good place to get some delicious food. The Korean beef and cheese pancakes across the road are epic.
If I expressed my thoughts right now , David Chaston would ban me for life form this forum . I am frankly tired of being lied to by politicians.
So are we to believe that line trotted out by our august leaders that foreigners have ' no influence on the property Market ' ?
Wilsons parking ( which to be fair does not own all the properties it manages ) earns a staggering sum in rents from something that has no doors , no hot water cylinders , defaulting tenants get a massive fine and sometimes a clamp for good measure , and the business and has got to be the best property investment in the world .
Wilsons is owned by a Singaporean
Foreigners dominate the commercial property sector at auctions , a huge chunk of Barry's Point Road is now no longer owned by Kiwis , and even the Westfield Mall in Glenfield is now owned by foreigners.
Who need guns to colonize a country ............. all you need is a mercantalist trade policy , earn US$ for your products pay your workers with monopoly money , and hey presto you can buy a whole country with the real money
Actually Boatman -
It doesn't even have to be real money (cash). Debt can be leveraged at lower interest rates abroad pretty much everywhere so anyone borrowing at local rates, can't compete anyway as their cost of funding could be up to 4 times higher.. 1.25% commercial loan from UK/China bank or 5% commercial loan in NZ from Aussie bank. We've been sold down the river by our former leaders and if the door doesn't close? Well I'll that with you all to think on.
There's nothing new about overseas investors being active in this country's commercial property market. When I was just a vibrant young thing, which is more years ago than I'd care to admit, most of what was then referred to as the Golden Mile was owned by Australian, UK and US-based insurance companies and investment funds, with a few local outfits like Landmark that mostly went tits up after '87. It's the move into residential property by overseas buyers that is relatively recent.
NZ under the National government sent representatives to Asia to *advertise* NZ as an investment opportunity.
That includes investment in property and business.
Yes - we ASKED for the property mess we are in, so that the National government could look like it was boosting our economy, and John Key would be a hero. In fact it was selling our country off. As a Kiwi I find this utterly disgraceful.
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