Auckland, 8 September 2014 – New Zealand looks set for its strongest year of commercial property investment sales since 2007, according to CBRE’s latest New Zealand Investment MarketView report.
Investment sales data from the first half of 2014, added to CBRE’s knowledge of transactions completed since the end of June and projected sales before the end of the year, shows that only 2007’s combined total of $3.7 billion should surpass 2014 in terms of total value.
The report highlights that:
- The value of sales in the first six months of the year has reached $1 billion with more than another $1.2 billion transacting just in July and August.
- Overseas investors and developers are exerting an increasing influence on the volume and nature of market activity.
- After a subdued period, activity is increasing outside Auckland.
- Local institutions continue to be net sellers as they recycle capital into development projects.
Zoltan Moricz, Senior Director of New Zealand Research for CBRE, says: “2014 will likely prove to be one of the historic watershed years for transaction activity both in terms of sales volumes and purchaser spread.
“Since the end of June, we have seen the sale of the APP portfolio, Lumley Centre and AECOM House, among many other transactions. Given what is known about the second half of the year, the combined total for the year could be up to and over $3 billion.
Moricz says that four key trends underpin transaction volumes in H1 2014:
- First is the increased activity in the development market. “From virtually nothing a few years back, development land has become the second most actively traded property type in the first half of the year, at 18.3% of the total and valued at $195 million. . The demand for development land has been wide spread from overseas developers/land bankers to New Zealand private and corporate institutional entities.
- Second, is the significant rise in sales to overseas purchasers, dominated in H1 by privates but with institutions making a big mark into H2. “A key theme here is the H1 activity of private offshore investors. In the second half of the year, the data shows that offshore institutions are also jumping in and becoming highly active.”
- Third is the large part played by local institutions in recycling assets and selling parts of their portfolios as they refocus on development. Listed property trusts and other managed funds sold over $250 million of property in the first half of the year
- Fourth is some recovery in Wellington and Christchurch transactions, following largely limited recent activity. CBRE recorded nine $5+ million transactions in the Wellington market totalling $142 million in the first half of 2014.
Moricz says: “New Zealand is looking very good as an Asia-Pacific investment destination compared to many markets. The attractiveness of our market combined with the global weight of capital seeking a home has resulted in investors from all over the world - including North America, Europe and Asia - actively looking at our market.”
View the New Zealand Herald article here
About CBRE
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2013 revenue). The Company has approximately 44,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through approximately 350 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
