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Retail boosts commercial transaction volumes

WestfieldTransaction volumes have totalled $1,260 million as a result of 67 $5+ million value properties changing ownership in the first half of 2017 according to CBRE’s latest New Zealand Investment Marketview report.

The largest transaction for the period was Westfield West City at 7 Catherine Street in Auckland which sold for $153 million by Scentre Group to Angaet Group and retail was the largest transactional sector according to the report with $371 million or 30 per cent of total sales volume.

At 26 per cent office market share dropped but with 18 properties and $328 million in sales sold remained high. Industrial sales totalled $224 million or 18 per cent by sales volume.

Investors have dominated purchasers for H1 2017, but developers were also active. Development Sites/Vacant Land constituted 14 sales totalling $257 million or 20 per cent of total sales, their highest market share in more than ten years. The largest sales include a development site next to Middlemore Hospital bought by Mansons for $66 million

“While transaction volumes are down slightly in the first half of 2017 compared with the same period a year ago, purchaser liquidity remains strong from well capitalised on and offshore parties countering the tighter credit conditions overall,” said Brent MacGregor, senior managing director for CBRE New Zealand Regional.

“Private investors are the most prominent purchasers with institutions the second largest group by transaction volume. Syndicates are less active than in recent times. Offshore investment is net positive for the first time since mid-2015, dominated by Asian and Australian parties.” 

Regional breakdown

In Auckland, there were 46 sales in the first half of 2017 totalling $1.0 billion and making up 80 per cent of the total volume nationally. Five transactions were above $50 million, the largest of which was Westfield West City.

12 development sites sold for a total of $245 million, 11 office buildings sold for a total of $212 million, and 14 industrial buildings sold for a total of $131 million. Retail sales contributed $363 million across 6 sales. One hotel sold for $13 million, and a car park was sold for $7 million.

There were 10 transactions over $5 million in Wellington, totalling $102 million. No transaction was above $50 million. The largest transaction was the sale of the Transpower House at 96 The Terrace for $25 million.

Office sales totalled $39 million across 3 transactions. Retail consisted of one transaction, a $5 million sale of Briscoes at 112 Jackson Street. There were 3 industrial sales totalling $27 million.

Christchurch had 11 sales totalling $156 million. The largest of these was the PwC building at 60 Cashel Street which sold for $49 million.

Offshore investment

Overseas investors injected $394 million into the New Zealand property market in the first half of 2017, and sold $228 million worth of property.

The most active were Australia, China, Singapore and USA. Australians were both vendors and purchasers, with $210 million of property purchased, and $204 million sold.

The overall overseas acquisitions for H1 2017 of $394 million, compares favourably with H1 2016 when overseas purchases totalled $355 million.

In terms of investor types, offshore privates purchased $271 million, while offshore institutions purchased $122 million worth of property.

There were six properties purchased by overseas privates with the highest price of $153 million paid for Westfield WestCity by an Australian private investor.

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