The largest sale was the Spark Central building at 40 Willis Street which sold for $197.5 million by a local private investor to a local syndication and that one sale alone constituted 71% of total Wellington sales volume.
The office sector made up $217 million or 78% of total sales making it the largest transactional sector in second half of 2018 while the accommodation sector accounted for 17% of sales volume.
A student accommodation building located at 222 Willis Street sold for $28 million by Forum Partners, an Australian Managed Fund to Value Partners Group a Hong Kong based listed Property Vehicle. Another student building Cumberland located at 237 Willis Street sold by Forum Varsity for $19 million to a local private investor.
On the vendor side, private parties sold $219 million or 79% of transaction volume across three transactions which is significantly higher than the 40% average over the last decade for private vendor sales. The proportion is also above the previous peak from the first half of 2015 when privates made up 71% of market share.
Syndications were the main purchasing group for the second half of 2018, at 71% of transaction volume or $198 million, which is well above the historical average of 8% over the past ten years.
Most of the transactions H2 2018 were below $10 million with two in the $5-10 million price range, two in the $10-$20 million, one transaction $20-$50 million and one transaction over $50 million.
Senior Analyst for CBRE Richard Carr says while the number of sales were well below the result recorded in the previous half yearly period this isn’t necessarily a reflection of market activity overall.
“The strength of the market is still apparent with significant bid coverage for Prime assets which are placed on the market. The activity from syndicators in Wellington is a positive sign, with more investor typologies looking positively at the outlook for the city.”
Matthew St Amand, Managing Director for CBRE echoes these comments. “Dry powder; capital which has a mandate for acquisition, has never been higher globally with many investors actively pursuing high quality assets. International funds are drawn further afield than traditional investment destinations which has seen many consider New Zealand for the first time. Global liquidity is seeking stable income returns; which Wellington is well positioned to provide.”
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