COMMERCIAL ASSETS Waikato Market Commentary

Estate Sale

21 MAHANA ROAD, TE RAPA, HAMILTON

• First time on the market in over 35 years 480sqm approx. industrial building

• 528sqm (more or less) freehold site

• Prominent location on Mahana Road, with profile to Norris Avenue

Currently configured for two tenancies

• Offered as vacant possession, in an ‘as is, where is’ basis

• Bring this property back to life! This has ‘project’ written all over it, especially for owner occupiers or add-value investors

Annual Construction Cost Growth Hits Record High

CoreLogic NZ’s Cordell Construction Cost Index (CCCI), which tracks the indexed growth of the country’s national residential building prices, recorded an increase of 1.7% in the final quarter of 2022, a significant deceleration from the record 3.4% increase in the three months to September.

However, the annual CCCI growth figure, which measures the cost to build a ‘standard’ 200 sqm three-bedroom, two-bathroom single-storey brick and tile house in Aotearoa, hit a new high of 10.4%, surpassing the previous record of 9.6% set in Q3.

CoreLogic Chief Property Economist Kelvin Davidson said a surge in new builds, materials supply issues, and labour shortages, alongside completion delays, had all contributed to the unprecedented increase to the cost of residential construction throughout 2022.

He said there had been suggestions demand would eventually ease, but evidence of a slowdown had only started to materialise in the final quarter of the year.

“For most of 2022, new dwelling consents have remained high, with smaller dwellings – especially townhouses – becoming an even higher share of the total (nationally 56% in the year to October, and 77% in Auckland),” he said.

“But the very latest data is finally hinting at the long-awaited slowdown, with October’s dwelling consent figure itself down by 12% from the same month a year ago.”

Mr Davidson warned even as new dwelling approvals slowed, the ‘huge’ pipeline of consents already granted would take time to be completed, providing builders and the industry with at least another six to 12 months of consistent work.

“Although the supply chain issues for building materials, such as plasterboard, have eased considerably, overall capacity pressures are still a concern,” he said.

“We can see the lingering strains clearly in the December quarter construction cost figures (1.7% rise), which were the lowest for the year, however the index is still running above the ‘normal’ increase of about 1% per quarter,” he said.

“The latest CCCI results are also higher than the rise of 0.9% in Q4 2021, meaning the annual rate of cost inflation has accelerated to 10.4%, the first double digit annual figure since the index was launched 10 years ago.

Annual inflation for construction costs is expected to hold at around 10% for the first quarter of 2023 Mr Davidson said, before easing over the rest of the year as the red-hot residential building sector finally starts to slow.

“Longer term, annual new dwelling consents are expected to ease from around 50,000 per year to the 30-35,000 range, which sounds like a significant slowdown, but remains higher than in previous years.

For more information or to read the report, visit www.corelogic. co.nz/reports/cordell-construction-cost-index

Source: CoreLogic Research News 9 January 2023

Auction: 11am, Wednesday 22nd March 2023, 678 Victoria Street, Hamilton CBD (unless sold prior)

Sean Stephens 027 478 1669 sean.stephens@naiharcourts.co.nz

Owner Occupiers with Holding Income

50 & 56 COMMERCE ST, FRANKTON, HAMILTON

• Two income streams from diverse and established tenants

• Returning $86,609pa net plus GST

• On-site car parking

• Profile site in CBD fringe area of Hamilton on a 835sqm (more or less) freehold title

• Total floor area of 844sqm (approx.)

• Front and rear access (rear via Sloper Avenue)

• Opportunity for investors, developers or owner-occupiers

Auction: 11am, Wednesday 22nd March 2023, 678 Victoria Street, Hamilton CBD (unless sold prior)

Theo de Leeuw 027 490 3248 theo.deleeuw@naiharcourts.co.nz

Stand Out from the Crowd

8-10 CHARLIES WAY, FRANKTON, HAMILTON

• Architecturally designed industrial building with a total floor area of 729sqm (approx.)

• 2 freehold titles of 2,041sqm (more or less)

• Secure concrete yard with parking

• Building and site with high security components

• Current site coverage only 30%, plenty of room for expansion

• Suit a multitude of industrial, manufacturing or trade supply and service activities Vacant possession offered

• Inspection recommended – we have the keys, so call us today

Sean

Owner Calls Time

37 VERCOE ROAD, BEERESCOURT, HAMILTON

• Floor area of approximately 134sqm Freehold title of 222sqm (more or less)

• Currently houses Vercoe Road Foodcentre, but the owner is moving on

• Well established suburban shopping centre Convenient customer car parking in front, with tenant parking in rear yard

• Chattels list includes fog canon and security bollards

• Affordable price bracket

• Vacant Possession

Auction: 11am, Wednesday 22nd March 2023, 678 Victoria Street, Hamilton CBD (unless sold prior)

Nicky Allardice 021 264 2144 nicky.allardice@naiharcourts.co.nz

Invest in Accommodation

4 HILL STREET, HAMILTON CBD

Residential accommodation lodge featuring 32 rooms

• New 6 year lease returning $200,000pa plus GST net

• Stand alone freehold building (consisting of 4 Unit Titles) with a land area of 1,011sqm (more or less)

• Excellent CBD fringe location with on-site car parking

• Close proximity to Wintec and Hamilton Transport Centre

• Well set up and managed facility by a proven operator

Sale Price: By Negotiation

Big Changes for Body Corporate Management & Governance

As high-density housing and apartment living becomes increasingly relevant in New Zealand, and many new commercial buildings and developments are unit titled, there has been a growing need for good governance of unit titled buildings and regulation of body corporate managers.

The Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Act 2022 (the Amendment Act) became law on 9 May 2022. Commencement date for the new provisions have 3 key dates:

• 9 December 2022 - Provisions to support remote attendance at meetings

• 9 May 2023 - Majority of the provisions will take effect

• 9 May 2024 - Provisions that require further regulatory development or preparation

The Unit Titles Amendments Act changes include:

Mike

027 451 5133 mike.neale@naiharcourts.co.nz

Could NAI Harcourts Property Management add value for you?

Whether it be just facilities management or full property management, we have the expertise, knowledge and systems to also assist you with:

• Strategic planning for your property

• Compliance with all regulatory requirements

• Leasing management & property inspections

• All repairs and maintenance

• Management, monitoring & negotiating service contracts

• Annual budgets, rent collection & debtor control

• Property accounting services

• Body Corporate management

• Statutory compliance and insurance

Our management fees are often

Ra Piripi 021 838 887 ra.piripi@naiharcourts.co.nz included as part of the operating expenses for a commercial property and therefore are recoverable from the tenants. We can take the day to day responsibility away from the client by managing the entire process and freeing up the owner’s time to concentrate on other opportunities.

If you would like to discuss how we can help with any of your property management requirements, please contact: greg.wills@naiharcourts.co.nz

Greg Wills at NAI Harcourts Hamilton.

M: 021 896 585

Greg Wills

• requirements for a wider range of information to be provided to prospective buyers. It also provides buyers with additional rights if these requirements are not met.

• strengthen governance arrangements in relation to a body corporate.

• raising the professional standards required of body corporate managers.

• ensuring adequate planning for long-term maintenance projects.

• introduce new dispute resolution rules and fees.

• will allow for greater flexibility in relation to utility interests and charges to unit owners.

• new regulatory powers

Previously unregulated, body corporate managers and the standard of their services are a key feature of the Amendment Act. Large unit developments’ with over 10 units will be required to engage a body corporate manager, unless they opt out by special resolution. The engagement of body corporate managers will need to be recorded in a written agreement and the agreement must include certain provisions, such as reporting requirements, performance targets and reviews, grounds for termination etc. Should you have any Body Corporate enquiries, please feel free to get in contact with our dedicated Body Corporate team.

Greg Wills: greg.wills@naiharcourts.co.nz or 021 896 585