PWC Centre Sold In Second-Largest Office Building Sale Ever In Christchurch

The PWC Centre, at 60 Cashel Street opposite the Bridge of Remembrance in central Christchurch, has been sold to to an equity investment company, Maat Consulting Limited, for $60m via Savills.

Savills New Zealand managing director Ryan Geddes, who brokered the off-market sale with colleague Jesse Paenga, says it is the second-largest office building transaction ever seen in Christchurch and the third sale of a large office building in the city in 2020.

“Three major office assets changing hands for around $200 million in total in the space of nine months is unprecedented in Christchurch and follows a few years of subdued transaction activity in the high-value office property market,” Geddes says.

“It proves that the city is considered a serious investment destination that now competes strongly with Auckland for attracting capital.”

In September, the Manawa building at 10 Oxford Terrace was sold to an individual investor for $76m following a sole agency run by Savills. In January, the Vodafone building at 213 Tuam Street was sold to a local investment syndicate for $59m.

Despite disruptions due to the Covid-19 lockdown, Savills has received significant interest in quality Christchurch office stock, demonstrating the vast amount of investment capital seeking placement at the moment, Paenga says.

“Christchurch is now firmly on the radar of a large number of institutional investors, high net worth individuals and syndicators which are currently looking for commercial property assets. One of the strongest drawcards is the favourable yield margin Christchurch offers over comparable assets in Auckland,” he says.

The Christchurch office property market has also displayed improving fundamentals over the past year which is likely to be another reason behind the recent flurry of large sales, says Geddes.

“We’ve seen a decrease in vacancy rates in the office market, as well as rents stabilising and some rental increases forecast. We also have high-quality, new buildings available with long leases and strong tenant covenants. This all adds up to improving office fundamentals which are catching the attention of investors seeking better returns than those available in Auckland.”

Syndicators are a particularly active group of buyers, with offshore investment interest in Christchurch also on the increase, Geddes adds.

The PWC Centre was sold to the Maat Group by Singapore-owned Grand Central (NZ) Limited, with the sale price representing a yield of 5.6%. It is the Maat Group’s first investment in the South Island. The company, which was formed in 2009, holds 14 commercial property equity investments in various North Island centres.

Neil Tuffin, managing director of the Maat Group, says the company chose to purchase this property in Christchurch based on the high quality of the building, the strength of the tenancies and the ability to return a satisfactory dividend return to the large number of investors who submitted their applications.

The PWC Centre provides 7,864m2 of office space across six levels, almost all of which is occupied. Net annual rent amounts to over $3.3m and the building also has around 100 car parks.

The outlook for future large commercial building transactions in Christchurch is positive, with value increases likely as more and more investors line up to acquire assets, Paenga says.

“The future of Christchurch as an investment destination looks highly favourable, especially as key projects such as the convention centre and new stadium move forward,” he says.

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