Buyers queue for quake-hit properties
05 Jun 2012
Earthquake-damaged commercial properties are being snapped up by cashed-up buyers in Christchurch.
By Susan Edmunds
Sam Staite, of commercial real estate firm CBRE, said he had a long list of investors wanting to buy commercial properties that were damaged in Christchurch's earthquakes.
Last month four were sold but he expected the rate of sales to pick up over the coming months as more people were in a position to sell. "People have only just started to settle with their insurance companies."
Sales prices would depend on how much value purchasers perceived to be left in a property. In many cases, that was land value.
Most sold were those that the insurance company had deemed uneconomical to repair. Landlords had already been paid out the sum the buildings were insured for.
Staite said in some cases, owners were doing quite well out of the deals. "Some have negotiated quite reasonable settlements [and then sold] while some can only get the full amount they were insured for if they rebuild... People could be making money out of land they thought was worth nothing."
If nothing else, a commercial landlord who sold a damaged property would save on demolition.
Buyers had to be cashed up, Staite said, because they were unable to get bank funding on properties with no insurance in place - as any without a structurally-sound building were.
Buyers were seizing the opportunity to buy inner-city commercial properties at a good rate. Many planned to fix and then tenant the buildings.
Staite said he would encourage anyone with a damaged commercial property to get in touch to find out what it might be worth to a buyer. "If you are considering an insurance settlement, it can offer clarity in terms of what the final outcome will be."