- Transaction volumes of $255 million in the $5+ million asset value over first six months of 2019 -
CBRE’s mid-year New Zealand Investment MarketView research report reveals that private investors were the most active buyers and sellers in Wellington’s commercial property market over the first half of 2019, which saw the number of sales nearly double against the H2 2018 period, however the dollar volume was lower indicating smaller average transaction sizes.
The report details that:
Transaction volumes totalled $255 million in the $5+ million asset value.
Increase in the number of transactions, with 14 properties changing hands in the first half of 2019.
With $185 million, or 73% in sales volume, office was the largest transactional sector in the first half of 2019. Industrial sales followed at 15% or $39 million. Retail sales stood at $15 million, or 6% by sales volume.
The largest sale involved Matauranga House at 33 Bowen Street, sold for $82 million by an Australian private investor to a German private investor. This was followed by the sale of AMP Society Building at 86 Customhouse Quay for $33 million, sold by a German private investor.
The Ministry of Business, Innovation and Employment call centre at 7 Heriot Drive was sold by a local private developer to a local syndication.
On the vendor side, private owners sold $212 million, or 83% by transaction volume over 10 transactions. The ten-year average market share of private vendors stands at 44%, so the current result stands well above the historical average.
Privates were the main purchasing group at 78% of the transaction volume, or $199 million, well above the ten-year average of 54%. Syndicates were also active purchasers in the first half of the year with $56 million or 22% of sales volume, against the 8% ten-year average.
The number of transactions increased in H1 2019 from H2 2018 by. In the past six months, there were 3 transactions in the $5-$10 million price range, 8 in the $10-20 million range, 2 in the $20-$50 million range, and one above $50 million.
Matthew St Amand, Managing Director of CBRE Wellington says “The 33 Bowen Street acquisition highlights that, despite some market challenges around insurance and seismic ratings in Wellington office sector, the growth outlook is sufficient to still attract strong offshore investment interest in Wellington for quality investments.”
Richard Carr, Senior Research Analyst for CBRE Wellington, says transactions in Wellington throughout the first half of the year have been dominated by local parties, with purchasers’ privates or syndicates the most active.
“In Wellington, private investors have been the most prominent purchaser group representing 78% of market volume. On the vendor side, privates are also dominating with 83% of the market. Wellington has seen a strong first half of the year, which is traditionally the weaker half so it provides a good basis for a strong annual result.”
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