tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Tuesday, March 19th, 5:49PM

News

rss
Latest Headlines

Commercial property sales booming

Record highs are expected for total commercial and industrial sales in the first quarter of this year.

Wednesday, July 28th 2021, 1:10PM

Total sales reached $1.731 billion for the quarter and while slightly behind the $1.832 billion of sales in the first quarter of last year, Colliers International’s latest NZ Research Report says the gap will reduce due to data reporting lags.

Surge in sales turnover

While the total number of sales for 2020 was about 30% under the 2019 figure due to lockdowns, sales data for the first quarter this year shows the market has rebounded strongly.

With almost 1,000 commercial and industrial properties sold in the first quarter, this is already on par with 2019 data records, and given the data lags, will potentially prove to be a record.

Safe haven

The demand for defensive assets has driven the high levels of sales within the industrial sector.

Last year the combined value of transactions reached $4.35 billion, accounting for 48.7% of all commercial and industrial property sales, the research report says.

The annual transaction count of 1,700 comprised 54.4% of all sales.

Sales accelerated in the final quarter of 2020 with $1.777 billion transacted, 38% ahead of the same quarter in 2019.

Momentum has carried through to this year with the value of sales likely to set a new record for the first quarter of a year.

Activity has been underpinned by strong demand and supply fundamentals.

Demand has been strong across many industries and strengthened at the beginning of the pandemic attracting high levels of investor competition.

Property funds and syndicators have been prominent buyers allowing them to bring a number of single asset syndications and multi-unit industrial funds to the market over the past year.

Office a two-tier market

In the first quarter of this year, there have been 124 transactions, providing $263.7 million in total sales.

This is down on the first quarter of all but one year since 2015.

The report says quarterly sales values though are volatile as they are heavily influenced by the timing of large-scale assets sales.

Disruption to the office sector was caused by the national lockdown, which forced businesses to adapt to having staff working from home and the speculation about how work practices will evolve over the long-term.

While office vacancy rates have risen in the major centres, a flight to quality is apparent.

Well located, prime grade properties, which provide strong occupier profiles have continued to generate high levels of investor demand.

Premises which fail to meet these criteria are being viewed more cautiously.

Large format retail leads the way

In the retail sector the combined value of 2020 sales totalled $1.473 billion.

The early part of 2021, however, has seen a rebound in activity. Just over 260 sales have been transacted, up on the 2019 total of 185.

The overall figures, though, obscure the fact that investor appetite for some classes of retail assets remains strong.

As with other assets, investors have shown a strong preference for properties that offer strong defensive qualities. As a result, demand for large format retail (LFR) premises, both stand-alone, and centres has been elevated.

The sector has had a strong lift in consumer spending over the past year which has underpinned tenant demand. This has seen vacancy rates holding at low levels, says the report.

By contrast the strip retail sector faces significant headwinds with changing shopping habits and increasing competition from online retailers resulting in increasing vacancy, particularly outside the prime locations.

Outlook

Commercial and industrial property sales activity is likely to set new record sales.

However, increases in interest rates will likely be incremental.

This suggests a low interest rate environment for an extended period that will buoy investors hunting for defensive assets.

An ongoing headwind for investors is the continuing rise in construction and labour costs, along with rises in land values.

Tags: Colliers commercial property industrial property retail investment

« Commercial property returns all-time highIndustrial buildings: Adapt or fail »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 ▼6.79 ▼6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 ▼7.29 ▼7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 ▼6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 ▼7.39 ▼7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.30 7.89 7.69
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.30 8.89 8.69
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 ▼6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 7.15 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

Last updated: 14 March 2024 9:32am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com