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    Investors eye trading sites

    LAWRENCE GULLERY Cashed-up investors are turning their attention towards commercial rental properties in Hastings and Napier as they realise higher returns for their money.

    The commercial market appears an attractive alternative for investors looking to move away from residential properties and interest in the twin cities is on the up.

    Those looking for a start in the commercial market can expect to pay between $300,000 to $400,000 for a property. At the higher end, commercial sites nearer the city centre had fetched up to $1.5million.

    Rental returns in suburban shopping areas for example was hard to pinpoint and depended on location, quality of tennant and the lease term.

    Commercial real estate agent, Jude Minor, of Colliers International in Napier, said suburban commercial properties, such as those in areas such as Marewa in Napier and Mahora in Hastings were "very tightly held".

    "Very rarely do we have a property on the market to sell. We have one on the market at the moment but it will probably go very quickly," Mr Minor said. "There is a very high occupancy rate for commercial properties in suburban shopping centres and I would say the same for Havelock North, Hastings and Napier."

    More property investors who had spent time building equity in the residential market were now thinking about a switch to commercial.

    "With residential, the revenue yield is lighter than in commercial and now the dollar value is within reasonable reach for investors, if they've been in the property market for a while," Mr Minor said.

    Bayleys real estate agent Rollo Vavsour, of Havelock North, said there were several reasons why commercial had advantages over residential.

    Landlords could command long-term lease periods of three years or more, compared to residential properties where tenants were transient at times.

    Tenants on commercial properties were responsible for rates, insurance and body corporate fees which would normally be picked up by the landlord in a residential situation.

    "Commercial real estate has always been considered a safe haven in New Zealand. Yields are higher and there's a lot of investor money coming to the Bay, something we weren't seeing about 10 years ago," Mr Vavsour said.

    International investors had also shown interest in Hastings, including an Australian firm now operating K-Mart. Mr Vavsour said those who had bought at the bottom of the commercial real estate cycle would "do very well".

    He was, however, reluctant to say where the "market cycle" was placed at the moment.

    "It is very strong at the moment."

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