Wellington in ‘enviable position’ as sales hit $426m in six months
Sales of Wellington commercial properties totalled $426 million in the first half of 2018, a new report has found.
The latest Marketview Transaction Monitor report by international real estate services agency CBRE found the large sum was stacked up with the help of 13 transactions topping $5m as well as strong interest from overseas.
Institutions were the most prominent buyers, making up 55 per cent of transaction volume ($236m). It was a stronger showing than their 10-year average of 30 per cent.
Institutions also made up the majority of sellers, accounting for 57 per cent of the market, followed by private investors at 43 per cent.
Nearly half of the commercial properties were sold to overseas companies and individuals.
The largest sale of the year so far was the HSBC Tower at 195 Lambton Quay, which sold for $103m to Credit Suisse.
The sale greatly added to the $146m total in office sales in the first half of the year, making it the largest sector in commercial property, accounting for more than onethird of the total sales volume.
Retail was the next largest transactional sector at 26 per cent of sales, or $110m, followed by the industrial sector at 7 per cent of sales, or $31m.
Private investors sold $182m or 43 per cent of transaction volume, which is above the 10-year average of 38 per cent, while institutional investors sold $243m of property (57 per cent of transaction volume), which is above on the 10-year average of 43 per cent.
Corporations accounted for $42m, comprising 20 per cent of transaction volume, up from the 11 per cent historical average.
CBRE senior analyst Richard Carr said the volume of transactions in Wellington for the first half of 2018 was a good indication of the buoyant market conditions.
‘‘Wellington has an enviable position right now, with strong forecasts supporting capital-value appreciation.’’
He said the activity in the market continued to demonstrate high levels of liquidity for prime assets.
‘‘Current market returns in Wellington remain attractive to a wide range of investors, who have been driven in 2018 to secure stable income streams and asset diversification,’’ Carr said.
‘‘With the strong rental growth experienced since the 2016 Kaiko¯ura earthquake, many vendors are demanding strong initial yields, in order to capitalise on recent market performance.’’
CBRE’s Wellington managing director, Matthew St Amand, said international investors were active and engaged in the market.
‘‘International confidence in the local market has been demonstrated – not only by the likes of Credit Suisse expanding their Wellington portfolio in 2018, but [also by] the range of maiden international investors looking for opportunities to secure highquality assets.
‘‘Attracting international capital in turn provides elevated liquidity and purchaser confidence, encouraging further capital to follow suit.’’