Development-friendly Zonings Fuel A Flurry Of Big Central Auckland Sales

A $16 million sale, negotiated during Auckland’s Level 4 lockdown, of a bare land site adjacent to the City Rail Link’s Karangahape Station is the latest in a long list of large central city properties with development potential that have been snapped up this year.

Bayleys has so far negotiated 17 $5 million-plus Auckland sales – totalling in excess of $180 million – involving properties with development-friendly Business-Mixed Use, Terrace Housing and Apartment or City, Metropolitan or Town Centre zonings.

“These sales range from vacant land sites to properties with extensive buildings and tenancies in place but they all have one thing in common – underlying land zonings which allow for intensive future development and in particular high density residential development which Auckland desperately needs to address a shortage of affordable housing,” says Alan Haydock, director of the Bayleys Auckland City & Fringe division.

“Purchasers have mostly been a mixture of developers, active investors looking to add value and more passive, long-term investors who under the right circumstances have shown a willingness to buy strategic sites at low income yields in the expectation that their underlying land values will continue to increase significantly over time.”

Haydock says he is experiencing his busiest year in nearly two decades of working in the central Auckland commercial property market, with its traditionally most active time – the three months in the lead up to Christmas – still to come.

“Our team has been breaking every historical sales record, both by value and volume, this year and we’re expecting this momentum to continue, assuming of course Auckland continues to move down lockdown alert levels.”

The $16 million sale, negotiated by Alan Haydock and Damien Bullick, encompassed a 1,777 sqm land holding located at 17-27 Beresford Square, with substantial frontage also to Hopetoun St, offering panoramic harbour and CBD views. It is among over 100 commercial and industrial transactions concluded nationwide by Bayleys during the latest Covid 19 lockdown levels from mid August.

Haydock says the purchaser has indicated they intend to develop the site for their own occupation. The property has a City Centre zoning enabling the most intensive

development permitted under the Auckland Unitary Plan up to a height limit of 35 metres. The site sold at just over $9,000 a square metre and a 4.72 per cent yield on a short-term lease to City Rail Link Limited which is using it as a base for the construction of the nearby giant underground Karangahape station.

Bayleys Auckland City & Fringe team have also been involved in two substantial sales in Great North Road, Grey Lynn, both with a Terrace Housing and Apartment zoning. One was a 9,121 sqm site at 406-428 Great North Rd which was sold for $30.15 million by Alan Haydock and Damien Bullick.

Bullick says the property has a massive road frontage of approximately 100 metres and contains predominantly older-style warehousing and small storage units with multiple tenancies either with short-term leases or development clauses in place.

One of Auckland’s most active multi-unit residential developers, Conrad Properties is intending to build 112 residences with garden courtyards, 12 apartments and seven retail units across the site.

Nearby, on the other side of the road at 339-361 Great North Road, Grey Lynn, a 2,832 sqm site was sold for $15 million at a 2.1 per cent yield by Alan Haydock and James Were. With 81m of main road frontage and also bordered by two side streets, it has a resource consent for a mixed-use development comprising 84 apartments plus ground floor commercial premises across two buildings of six and seven levels with a gross floor area of 9,036 sq m. Current buildings totalling 503 sqm, including a Caltex service station, are tenanted on varying terms.

“This landholding is superbly located on the coveted north-facing stretch of Great North Rd ridge which offers sweeping city and sea views and is already home to a number of apartment buildings which have been developed in recent years,” says Were.

Further south, a 9,281 sqm under-utilised site zoned Mixed Use at 519 Ellerslie- Panmure Highway, Mount Wellington has been sold by Haydock and Bullick for $18 million. Its 3,275 sqm of retail and workshop buildings are fully leased to two Asian restaurants and a Chinese supermarket. Haydock says a total of 12 offers were received from a range of investors and developers. The successful purchaser was an add-value investor who will receive an initial yield of 3.43 per cent on the current net rental.

Other $5-million-plus transactions with development potential concluded by Bayleys include:

• A 2,949 sqm site zoned Town Centre close to the train station at 2 Robert St, Ellerslie with a fully leased 2,522 sqm retail and office complex plus 74 carparks sold for $13.7 million at a 6.2% yield by Cameron Melhuish, Sunil Bhana and Tony Chaudhary.
• A 1,821 sqm site zoned Mixed Use with a five-bedroom house and a smaller two-bedroom dwelling at 6 MacMurray Rd, Remuera sold with vacant possession for $10.018 million including GST by Alan Haydock and Damien Bullick.
• 1,765 sqm of bare land on the opposite side of the street at 5 MacMurray Rd sold for $8.25 million plus GST by Alan Haydock, Damien Bullick and Andre Siegert. This site was previously occupied by the MacMurray Digestive Disease and Endoscopy Centre which has relocated to new purpose-built premises next door.
• Two adjoining Town Centre zoned sites totalling 3,785 sqm at 181-189 Apirana Avenue, Glen Innes plus 1,677 sqm of commercial buildings with seven tenants sold for $8.15 million at a 4.28% yield by Alan Haydock, Damien Bullick and Dave Stanley. Residential and commercial development is permitted up to a height of 32.5m.
• A 1515 sqm Mixed-Use zoned site 116-120 Surrey Crescent, Grey Lynn, with three dwellings totalling 575 sqm converted for childcare use, sold for $8.075 million at a 2.53% yield by Alan Haydock and Damien Bullick. Leased to NZX listed Evolve Group, with a rent review to market triggered in July 2022 if it exercises the first of two three-year rights of renewal.
• A 912 sqm site at 31-35 Dacre St, Newton with a 1,533 sqm, two-level extensively refurbished 1960s’ office, showroom and warehouse building sold mostly vacant for $7.4 million by Alan Haydock and Damien Bullick. The Mixed Use zoned property also benefits from an additional height overlay allowing development up to 32.5 metres.
• A 1,600 sqm site zoned Terrace Housing and Apartment Buildings at 30 Shelly Beach Road, St Mary’s Bay sold vacant for $7.12 million by Damien Bullick, Alan Haydock and Ken Hu. A 536sqm character building was previously utilised as two-level, 39-bedroom boarding house.
• A 1660 sqm Mixed Use zoned site at 37-39 Leslie Avenue, Morningside, with a 1,447 sqm warehouse and office property building sold partly vacant for $5.65 million by Alan Haydock and Jean-Paul Smit.

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