Commercial property in Christchurch

[Financially dependant]

Is there anyone else looking for a commercial property in Chch for an investment?

They seem to be priced to an 8% yield (which just about covers finance costs) for smaller properties, the available leases seem to get snapped up quite quickly. The are properties available but not much is being built yet because of the geotec and insurance issues, the building costs are heading North and will accelerate when rebuild gets started.

So buying a newish property that did well in the quakes seems like a good buy at the moment?

Comments welcome??

[Serpie]

I've been thinking about that FD, but not looking at the moment.

We're looking to settle out of some residential rentals in next year (if MWH can get their A into G) and so I'm starting to think about what to do with the funds, and commercial seems more attractive than going back into residential. We wont have enough to do something by ourselves, so keep us in mind for anything that you're looking at.

We'll have a more in depth "planning meeting" (mexican at ours) early in the new year?

[Kees]

yes always looking bought a 6 year old building straight after september quake and stood up quite well against the other shocks so all good.
bought at 10.5% nett return lease comes up for renewal early next year with rent review as well so will be interesting i would think that commercial
will be in demand for the next few years.

[Financially dependant]

yes always looking bought a 6 year old building straight after september quake and stood up quite well against the other shocks so all good.
bought at 10.5% nett return lease comes up for renewal early next year with rent review as well so will be interesting i would think that commercial
will be in demand for the next few years.

That is a good yield compared to quoted prices now, most are listed with a 8.5% yield.....but looking for a better return. I am quite surprised at the cost of finance quoted 8-9% what have been your experiances??

[fungus pudding]

Is there anyone else looking for a commercial property in Chch for an investment?

They seem to be priced to an 8% yield (which just about covers finance costs) for smaller properties, the available leases seem to get snapped up quite quickly. The are properties available but not much is being built yet because of the geotec and insurance issues, the building costs are heading North and will accelerate when rebuild gets started.

So buying a newish property that did well in the quakes seems like a good buy at the moment?

Comments welcome??

It's a olong time since I owned Ch-ch buildings, and haven't looked there for a good few years. The thing you touched on to be very wary of is insurance. If premiums get too high then the rent (rate per metre) will drop a bit - or not increase - to compensate. There was a high percentage of Chch tenants who were only in business because of grotty old buildings with correspondingly low rent. I have a feeling some of them will be out of the picture forever. That might just mean the demand for space is not as high as some anticipate.

[Financially dependant]

It's a olong time since I owned Ch-ch buildings, and haven't looked there for a good few years. The thing you touched on to be very wary of is insurance. If premiums get too high then the rent (rate per metre) will drop a bit - or not increase - to compensate. There was a high percentage of Chch tenants who were only in business because of grotty old buildings with correspondingly low rent. I have a feeling some of them will be out of the picture forever. That might just mean the demand for space is not as high as some anticipate.

Thanks FP you make a good point, to take that issue one step further low renters might be gone or maybe have to move out on to cheaper & stable land?? Food for thought..

Insurance is already doubling but pressure on available space is keeping rents up so ok at the moment but that might change...

[Kees]

paid cash for that one so dont know, quite right about insurance but more to do with revaluation due to increased building cost's. specially replacement

[fungus pudding]

paid cash for that one so dont know, quite right about insurance but more to do with revaluation due to increased building cost's. specially replacement

I'd say one helluva lot to do with perceived risk. Naturally insurance increases with higher replacement cost, always has - always will. Some insurers are demanding huge premiums, or simply refusing cover because of recent quakes and an unknown future.

[Financially dependant]

I'd say one helluva lot to do with perceived risk. Naturally insurance increases with higher replacement cost, always has - always will. Some insurers are demanding huge premiums, or simply refusing cover because of recent quakes and an unknown future.

I note that the Insurance 'loss of rent' is running out now which might send quite a few owners to wall...there is still lots of unknowns out there..

[fungus pudding]

I note that the Insurance 'loss of rent' is running out now which might send quite a few owners to wall...there is still lots of unknowns out there..

Yes. Might be some opportunities on the horizon ..............