$3.8b

The big number in property sales

Commercial property sales of $3.8 billion have been recorded so far this year, driven mainly by syndicators and strong overseas interest, according to a study out this month.

Although the total is slightly down on the $4b in the first half of 2017, the report from Colliers International noted a “strong surge” in office sales.

The figures are only for assets with a value of $5 million or above.

Colliers said this year’s biggest commercial sales were:

● The planned sale of the ANZ Centre, 23 Albert St (a 50 per cent stake) to US fund Invesco for $181m;

● The sale of the Central Park Corporate Centre to Oyster and joint venture partner KKR for $209m;

● Goodman selling its VXV portfolio to Blackstone Fund for $635m.

Late last month, NZX-listed Precinct Properties announced it had entered a binding agreement to sell a half-stake in the ANZ Centre in the city’s CBD for $181m, subject to Overseas Investment Office consent.

Last month Goodman Property Trust, which also listed on the NZX, announced the settlement of the Central Park property at Greenlane.

On May 18, Goodman announced it was selling is VXV office portfolio in the Wynyard precinct.

Seven blocks were involved in that deal: the KPMG, Auckland Transport, Microsoft and HP, Fonterra Centre, Bayleys House, Datacom and Air New Zealand buildings.

The Colliers report said such big deals were driven by investor optimism and a shortage of prime stock availability, leading to rental uplifts for landlords.

“Prime average yields have also reached record low levels in Auckland [5.5 per cent] and Wellington [7.5 per cent], the lowest since the global financial crisis. Impressively, Christchurch reached record low yields historically at 6.6 per cent in June 2018,” the report said.

Colliers welcomed changes to the Government’s foreign buyer ban, noting Singapore would join Australia as exempt and expressing satisfaction with big changes on apartment sales to foreigners.

“The proposal now allows foreign buyers to hang on to apartments or houses bought off the plan, given that it is part of a development of 20 or more units...foreign buyers would still not be allowed to purchase existing standalone homes.”