Plenty of activity still to come in Canterbury market: Colliers
Despite higher interest rates and a cooling national economy, Canterbury's commercial property market continued to perform strongly in 2022, Colliers says. Key property fundamentals supported the market, with another solid performance predicted this year.
Mark Macauley, general manager of Colliers Christchurch, says the local market has been a hive of activity in recent years, fuelled by low interest rates, record low office and retail vacancy in the inner city, a burgeoning transport and logistics sector, and diminishing supply of industrial land.
Last year was marked by several significant Christchurch transactions, including: Northlands Mall, $160 million Countdown’s new distribution facility at Rolleston in a 15-year sale and leaseback with the total project cost reported at $99 million
A healthcare building in St Asaph St, $52 million A $50 million industrial portfolio
YHA portfolio sale, reported at approximately $60 million
These and other large sales were predominantly to private investors, syndicators, and property funds.
Despite rising interest rates and prevailing economic uncertainty, Macauley is still optimistic about the year ahead.
“The headwinds of rising interest rates are being countered by rental growth and low vacancy levels across all sectors of the market. With growing consensus that we may have hit the inflation peak, we’re seeing more confidence from investors looking to invest,” Macauley says.
“I’m hugely confident about Canterbury’s ongoing growth over the next 10 years as the city blueprint, created following the earthquakes, really starts to bear fruit and we see many of the anchor projects up and running or under construction. CBD residential in the Four Avenues is taking hold, looking great and lifting the vibe of the central city.
“Christchurch is regarded as a highly desirable place to live and work; the city is easy to get around now that all the roading networks are complete, and there’s a supply of modern and affordable housing stock. It’s no surprise that we are seeing businesses and families relocating to Christchurch.
“The CBD is far more vibrant than it’s been in a long time, people are back working in the city with the working from home phenomenon far less prevalent here than in Auckland or Wellington.”
CBD office vacancy is at its lowest since Colliers began surveying the market in 1993 and businesses are vying for what little space remains.
Significant new office builds are under way to meet demand.
Anthony Leighs now has the go ahead to start construction on his high-end $30 million building in High St, which only has one floor remaining, while site works have begun on the Carter Group’s retail and office building in Cathedral Square.
Added to those offerings, the structurally upgraded and refurbished former Design and Arts College brings a sought-after unique heritage offering with total net lettable area of 5374sq m.
CBD retail in Christchurch has never had it better, with slim pickings for national and international retailers searching for premises fronting onto the Cashel Mall precinct with demand outstripping supply. Peebles Group’s new office and retail block opposite Riverside Market has attracted a Nike flagship store, together with lifestyle and adventure outdoor apparel brand Helly Hansen signing its first New Zealand store.