Industrial dominates across markets and local privates most active purchasers
Sustained growth is being experienced in the Christchurch commercial property market with local investors continuing to fuel high levels of transaction activity, according to the latest research by CBRE New Zealand.
The Transaction Monitor MarketView report for the second half of 2018 confirms $241 million of transaction volume in the $5+ million asset value bracket for the period with 14 properties changing ownership. The result being both an increase in volume from the first half of last year ($234 million) and number of properties (13).
The volume of sales for the period also reflects an upward trend since the first half of 2013 buoyed by newly constructed stock coming onto the market.
Six of the transactions were in the $5-$10 million price range, four in the $10-$20 million range and three in the $20-$50 million range.
Industrial properties accounted for most of the activity in second half of 2018 with $96 million or 40% of the sales volume in Christchurch, office (36%) at $86 million of volume and retail of $27 million (11%). In addition, a parcel of vacant land sold for $25 million constituting 10% of sales volume.
Activity was dominated by local investors in form of privates and syndications according to the report, with one large sale by a local institution. All but one purchaser was local and only one sale was by an overseas corporation.
The largest of these was a $54 million transaction of Castle Rock Business Park at Innovation Road by a local investor to Augusta Industrial. This was followed by the sale of 12 Moorhouse Ave for $38 million by a local private investor to another local investor. Newly constructed office building at 209 Cambridge Terrace also sold for $25 million by a local developer to a group of local private investors.
On the vendor side, privates sold $208 million or 86% transaction volumes which is well above the historical average of 44% over the last decade.
Privates were also the main purchasing group accounting for 69% of transaction volume ($167 million) which is akin to the ten-year average.
Managing Director for CBRE Christchurch, Tim Rookes, says it is encouraging to see the continued stability in Christchurch with the number of transactions for half yearly periods hovering around the 13 mark since 2013 when the first growth in activity occurred post the quake.
“While most of the transactions had been occurring in the lower price bracket, more recently, and as illustrated in this latest result, we’re seeing a steady increase of transactions above $10 million. Another noticeable trend is where as for previous second half year periods, new constructions were especially popular, current results shows demand across the board with new constructions, pre-existing buildings, and development land changing ownership. Both trends signalling a healthy outlook for the market in Christchurch into 2019.
“Most positive of all is the growing reputation for Christchurch as an investment destination.”
ABOUT CBRE GROUP, INC.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
