A guy walks into this bar with low yield

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A downtown Queenstown bar and cafe illustrates a truth about local commercial property, a local Colliers International consultant says. 

Commercial property consultant Andrew Hyndman, addressing last Friday’s launch of Colliers’ annual Queenstown Market Overview, says the Red Rock Bar & Cafe property sold last year for $2.3 million, representing a yield – or annual rental return – of only 3.95 per cent. 

“Queenstown commercial property doesn’t come up every day so when it does there’s a lot of competition for it. 

“An investor is willing to live with that yield to get on to the Queens­town commercial property ladder. 

“It’s still a lot of money but it’s an affordable investment for someone wishing to get into the market,” Hyndman says. 

“If you bought a larger asset that was worth $20m, for example, the purchaser is more likely to be a syndicate or a property trust and they would want a higher yield.”