commercial property transactions in 2nd half of 2019
$2.8 billion in commercial property transactions in 2nd half of 2019
| 9 March 2020
4th highest total ever as syndicator and institutional activity strengthens, buying $433m in property
CBRE’s latest New Zealand Investment MarketView research report reveals that syndicates and institutions are propelling New Zealand’s commercial property market upward, with the second half (H2) of 2019 recording the fourth highest transaction volume in the market’s history.
The report details that:
In H2 2019, transaction volumes totalled $2.8 billion as a result of 116 $5+ million value properties changing hands
The office sector was the most active (34% / $957 million in sales), followed by industrial (28% / $769 million) and retail (14% / $394 million)
A good number of $20+ million sales took place, with ten sales above $50 million and three over $100 million.
Syndicators exhibited strong acquisition activity levels and minimal interest in disposal, giving this investor category a sold net gain in assets under management. The largest purchase by a syndicator was Tauranga Crossing at 2 Taurikura Drive in Tauranga, acquired by Oyster Property Group for $189 million.
Institutional investors showed similarly strong activity, selling $147million, and buying $902 million of property in H2 2019.
Investment activity by overseas purchasers was led by the groups in the Asia-Pacific region, particularly concentrated on the CBD office markets. Overseas investors injected $551 million into the New Zealand property market in the second half of 2019 and disposed of $88 million worth of property.
The most active purchasers were from Asia, Australia, China and Singapore. Of these, Hong Kong-based PAG Asia announced two acquisitions in Auckland, valued at $393 million.
Auckland and Christchurch sales increased, while Wellington experienced a slight dip following strong 2018 activity.
In Auckland, 84 sales totalled $1.9 billion comprising 78% of the national sale volumes. There were seven transactions above $50 million, including the sale of 136 Fanshawe St for $330 million by Mansons to PAG Asia, the disposalof development land within Stonefields by Todd Property Groupfor $90 million, the main Turners & Growers site in Mt Wellington to Goodman for $65 million and the Four Points by Sheraton at 396 Queen Street for $65 million.
In Wellington 14 transactions over $5 million totalled $203 million. The largest of these was a portfolio of 43 Seaview Road and 120 Hutt Park Road sold to a local syndication for $56 million, and the Te Aro Exchange building at 7 Allen Street, which sold for $20 million.
In Christchurch, there were 13 sales totalling $340 million. The largest was the Calder Stewart portfolio consisting of 11 industrial properties which sold for a total of $170 million to a purpose-formed managed fund.
Brent McGregor, Executive Chairman of CBRE NZ, cited the ongoing strong liquidity levels, increasing average deal sizes and continued interest in NZ by offshore buyers as key features of the market.
“The last 20 sales campaigns run by the CBRE Capital markets team has seen a total of 118 bids and a bid value of $9.4 billion. We are still seeing on average around six bids per campaign and upwards of 10 bids for sought after industrial and office stock.”
Zoltan Moricz, Senior Director of Research for CBRE New Zealand, says, “Rising transaction volumes in the second half of 2019 represent a continuation of an overall growth pattern observed since 2011.
“Although private investors were the most prominent purchasers, followed by institutions, this investor group are still net sellers. This has continued the shift toward a greater proportion of assets being in institutional or managed fund ownership.”
For New Zealand/international news or global stories, follow us on Twitter.
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 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 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.