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Office sector leads New Zealand commercial property returns

Office sector leads New Zealand commercial property returns

Sydney, 22 August 2014: The PCNZ/IPD New Zealand Quarterly Property Index Q2 2014 results, released today, showed a total return of 11.1% for the year-ending June 2014. This was comprised of 7.7% income return and 3.1% capital growth.

The market was led by the office sector with a return of 11.9%. Performance in the office sector has been supported by a recovering labour market which has helped boost demand for office space in key markets like the Auckland CBD. According to Statistics New Zealand, the unemployment rate fell to 5.6% in the June quarter, its lowest level since March 2009, and full time employment growth, at 4.6%, was at its highest level in over nine years.

Anthony De Francesco, Executive Director at IPD said “The June quarter PCNZ/IPD Index release indicates the commercial property investment market remains on the recovery path. A strengthening in macroeconomic activity, driven by increase in construction activity, solid employment growth and retail sales growth, are indicating a positive economic outlook ahead. These positive factors should, in turn, be reflected in solid property investment returns.”

New Zealand real estate has been outperforming the Australian market since September 2012, a trend which continued in the June quarter. At 11.1%, the New Zealand total return is currently 138 basis points higher than returns across the Tasman Sea.

Connal Townsend, Chief Executive Officer at Property Council said “The IPD results this quarter are very gratifying and provide the market with a clear, reliable indication that the New Zealand economy in general and the commercial property sector in particular remain comfortably in recovery mode.”

The PCNZ/IPD New Zealand Quarterly Property Index consists of 26 contributing funds with a combined asset value of NZ$12.7bn held in 578 investments.

About IPD

IPD provides real estate benchmarking and portfolio analysis services to clients in over 30 countries around the world. These services incorporate more than 1,500 funds containing nearly 77,000 assets, with a total capital value of over USD 1.9 trillion. Each year, IPD produces more than 120 indexes helping real estate market transparency and performance comparisons, as well as nearly 600 benchmarks for client portfolios. IPD is a subsidiary of MSCI Inc., a leading provider of investment decision support tools to investors globally, and clients include real estate investors managers, consultants, lenders and occupiers. For further information on IPD, please visit


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