Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Office market leading the pack

Please find our latest press release on JLL’s analysis of transaction trends for Q114.

Office market leading the pack

Increasing investor confidence and an improving economic climate is continuing to drive transaction volumes to new records across the New Zealand market. Following the strong start to 2013, the second half of 2013 has seen this momentum continue. A total of over NZD 2 billion worth of property was transacted in 2013, a level not seen since before the GFC.

The office market continues to lead the pack as investor demand remains strong. A total of NZD 605 million of office transactions were completed, a 188% increase to total office sales when compared with the same period in 2012. The largest of these being 73 Remuera Road which was sold for NZD 100

million at an initial yield of 7.0%. The second largest sale was the 205 Queen Street which was sold to the Australian property firm Bloomberg Incorporation.

Justin Kean, Director of Research and Capital Markets at JLL says, “These purchases and others like it are motivated by the fact that demand for new builds in fringe areas still remain strong. The greatest gains to be made in the New Zealand market are in the office sector, however timing in the asset class is everything with the deep value swings in the sector adding significantly to the sector risk and of course potential returns.”

Kean continues, “While several assets were purchased by international investors over 2013, we expect to see this interest intensify through 2014 as New Zealand continues to remain a favourable location to international investors. This weight of capital will likely see Australian investors back in New Zealand before year end looking for non-core plays.”

Private investors remained the most active investors over the last half of 2013 accounting for 54% of all transactions. REITs including NPT, Argosy and DNZ as well as several corporates were also active over the period.

The industrial sector transaction values have experienced further improvements, rising 85% when compared to 2012. The second half of 2013 saw the majority of purchases completed by private and stand-alone investors, with the only one major investment from a REIT coming from Argosy Property’s purchase of 19 Nesdale Avenue, Wiri.

Sam Smith, National Director of Industrial Sales and Leasing for JLL says, “Steady income stream, single tenant and value add potential benefits have attracted several investors to industrial property. The most popular price level has been the smaller to mid-sized assets ranging NZD 5 to 10 million which are being traded mainly by high net worth individuals with access to capital.”

Auckland continues to make up the majority of all sales in the country with 76% of all transactions occurring in the Auckland region with Wellington and Christchurch taking 10% and 8% respectively. Strong capital flows have also been recorded in other parts of New Zealand with NZD +5 million transactions being recorded in Hamilton, Dunedin and Palmerston North.

Office assets will continue to remain a top pick for investors, however as markets offer greater liquidity, prime industrial and retail assets are likely to enter the market as buyer activity remains strong.

All sectors are experiencing stronger demand in tandem with a modest development pipeline which is likely to feed further growth in rental levels. If these conditions keep tracking at current levels, we are likely to see the larger corporations and REIT’s to be more prominent over 2014. It is expected that in 2014 that the NZD5-10 million price stratum will remain the most popular for investors due to the easier entry level as well as the amount of available stock.

JLL’s analysis covers all real estate sales transactions across New Zealand above $5 million. The second half of 2013 saw transaction volumes rise 70% compared with the second half of 2012, as investor confidence continues to improve, spurring on demand.


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Farming: Alliance Plans To Start Docking Farmer Payments

Alliance Group, New Zealand's second-largest meat cooperative, plans to start withholding some stock payments to its farmers from next week to bolster its balance sheet and force suppliers to meet their share requirements. More>>

ALSO:

Gambling: SkyCity First Half Profit Rises 30%, Helped By High Rollers

SkyCity anticipates the Auckland business will benefit from government gaming concessions which were triggered on Nov. 11 in recognition of SkyCity’s $470 million Convention Centre development. Morrison said the concessions would allow the Auckland business to lift its activity during peak period, noting it had a record revenue week over the Christmas and New Year period. More>>

ALSO:

Money For Light: Kiwi Scientists Secure Preferential Access To Synchrotron

Science and Innovation Minister Steven Joyce today announced a three-year investment of $2.8 million in the Australian Synchrotron, the largest piece of scientific infrastructure in the Southern Hemisphere, to secure preferential access for Kiwi scientists. More>>

Telco Industry Report: Investment Hits $1.7 Bln A Year

Investment in the telecommunications sector is $1.7 billion a year, proportionately one of the highest levels in the OECD, according to a report released today on the status of the New Zealand sector. More>>

ALSO:

PGPs: New Programme Sets Sights On Strong Wool

A new collaboration between The New Zealand Merino Company (NZM) and the Ministry for Primary Industries (MPI), announced today, aims to deliver premiums for New Zealand's strong wool sector... More>>

ALSO:

Restrictions Lifted: No Further Tau Flies Found

The Ministry for Primary Industries (MPI) confirms that all restrictions on the movement of fruit and vegetables in Manurewa, Auckland, due to the Tau fly, have been lifted as of 2.26pm on Sunday 7 February. More>>

Crowdfinding: Awaroa Beach To Become Public Land If Appeal Succeeds

Conservation Minister Maggie Barry says a privately-owned beach will become part of the Abel Tasman National Park if an online crowdfunding campaign to buy it succeeds... More>>

ALSO:

Meat Workers Union: Waitangi Mondayisation Flaunted By Large Employer Of Maori

At the AFFCO Talley owned meat plant in Rangiuru, the company has resorted to bullying and threats... saying they could be disciplined and their union sued for an unlawful strike if workers exercise their rights to a paid day off tomorrow. More>>

Earlier:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news