The sale of a Blockhouse Bay childcare centre at Colliers’ auction on Wednesday presented intriguing calculations on value, suburban intensification and the contest between business & residential uses.
A Takapuna office building, also likely earmarked for redevelopment, was passed in at an auction at Colliers’ local office on Wednesday, and a vacant Papakura industrial property taken to auction on 18 September has since been sold.
Whole neighbourhood intensifying
The Blockhouse Bay property – residential with a business use – has an old house at the front of the section plus other structures, but is steadily being surrounded by more intensive townhouse developments.
It could be redeveloped to take 3 dwellings as of right, allowing for 2 storeys in the mixed housing suburban, whereas the mixed housing urban zone closer to the city centre allows 3 storeys.
At a time when the clamour over Auckland’s “housing crisis” has eased – it’s hard to bang incessantly on a drum for a decade and have people still believe your call is urgent – but development of cheaper housing hasn’t been a significant outcome, what value is land in an average south-western isthmus suburb? Is that the sort of area where replacement or infill housing might ease the crisis?
Quotable Value Ltd’s latest sales figures show a median home value in Blockhouse Bay of just under $960,000, down 2% in the year to June, and median rent of $585/week.
Medians, yields & land prices
At the median rent for the area, annual rent would be $30,420, putting a 3.17% yield on a median rented home. But using the median residential rent & the sale price for the childcare centre – on an ordinary suburban street – would lift the yield to 6.84%.
Using the median home value for the area, $960,000, the land price would be $1133/m². But at the price it was sold for at auction, the section’s value is $1706/m² – exactly 50% higher.
Converting that cost to the land price for 3 townhouses (ignoring costs of demolition, infrastructure such as new pipework, and splitting communal access 3 ways) would take the land price to $481,000 for each home.
Takapuna, where parking is cheap
The Takapuna building has National MP Maggie Barry’s electorate office as the most prominent of its 6 tenants. Rents in the building range from $175-224/m²/year and parking rents equate to $25/space/week ($1300/year).
In comparison, the price for casual users to park in 2 of the 3 main parking buildings in central Auckland, the Civic & Victoria St, is $24 for a day, and at the Downtown parking building it’s $40/day, or $373/month, equating to $16-17/weekday.
In Takapuna, prices 100m away from this office building at the Anzac St carpark are $1.50/hour for the first 2 hours, $3/hour thereafter ($27 for a full weekday).
19 Busby St:
Features: 847m² site zoned residential – mixed housing suburban, occupied by childcare centre, 248m² net lettable area – 2 buildings totalling 174.7m², 28.5m² verandah, 45m² canopy
Rent: $84,240/year net + gst + opex based on 36 children at $45/child/week, new 12-year lease from June plus 2 6-year rights of renewal, CPI annual rent reviews plus 6-yearly reviews to market
Outcome: sold for $1.445 million at a 5.83% yield
Agents: Shoneet Chand, Ned Gow & Gawan Bakshi
15 Anzac St:
Features: 875m² site zoned business – metropolitan centre, 2-level office building with 666m² net lettable area, 6 tenancies, 14 parking spaces
Rent: $156,346/year net + gst + opex
Outcome: passed in at $3.1 million, at a 5.04% yield
Agents: Euan Stratton & Matt Prentice
5 Old Wairoa Rd:
Features: 2120m² site zoned light industrial, refurbished, vacant 1990s building containing 1144m² net lettable area – warehouse 930m², 4m stud height, workshop 160m², office 54m², seismic assessment 80% new building standard
Outcome: paused at auction with bid at $1.95 million, sold post-auction for $2.15 million
Agents: Paul Jarvie & Ash Vincent