Sunday Star-Times

Central Park the top deal

It was a healthy year for office deals and another good year looms. Catherine Harris and Chris Hutching report.


The biggest office property deal last year was Goodman NZ’s Central Park. The office complex was sold to syndicator Oyster Group and an unnamed party for $209 million in November and awaits Overseas Investment Office approval.

Goodman NZ’s chief executive John Dakin said Central Park was the last in a series of asset sales, meaning the company’s $2.4 billion portfolio was now 90 per cent tilted towards the Auckland industrial sector.

The second biggest sale of the year was 205 Queen St to Singaporea­n firms Roxy Pacific and Chip Eng Seng.

The joint venture has been given Overseas Investment Office approval to buy the leasehold interest in the property, known as the ‘‘twin towers,’’ for $174m.

It was sold by Singaporea­n Ktong H T Yi and Indonesian Edy Hardijana Tjugito, the controllin­g interests behind a British Virgin Island registered company, Bloomberg Incorporat­ion.

They bought it from NZX-listed Kiwi Property in 2013 for a reported $95.8m.

Kiwi Property’s Majestic Centre in central Wellington for $123m was the third largest deal.

It was followed by Auckland’s 46 Sale St for $144.5m – a new build bought by PAG Asia – and Roxy Pacific’s purchase of the NZI Centre in Auckland for $63m.

Tom Barclay, research director at JLL, said 2017 was a strong year.

‘‘There has been very high levels of offshore interest in commercial property from offshore funds, particular­ly for CBD office assets, which has pushed yields down to record lows.

‘‘To a certain extent this is pricing out local investors. Industrial had a strong year with high transactio­n volumes and sharpening yields, while retail saw substantia­lly lower transactio­n volumes.

‘‘We are still tallying the final numbers, but it looks as though overall transactio­n volumes will be down on 2016, due to a few factors such as a lack of trophy assets in the market, the slow-down period around the election and also the fact the Wellington market is still recalibrat­ing.’’

But looking forward he believed this would be another positive year for commercial proerpty investing, with high levels of interest in the alternativ­es sector – ‘‘think hotels, student accommodat­ion, retirement villages and mixed use developmen­ts’’.

‘‘I think across all commercial property sectors yields for the most part have now reached a cyclical low point. There may be some further compressio­n where there is strong competitio­n for premium assets but overall, growth for 2018 will be driven more by rental increases more so than yield compressio­n.

‘‘Locally I think we will see more sale & leaseback activity and the industrial market is going to continue to perform well,’’ Barclay said.

 ??  ?? An artist’s impression of Goodman’s Central Park complex in south Auckland.
An artist’s impression of Goodman’s Central Park complex in south Auckland.
 ??  ?? 205 Queen St went for $174m.
205 Queen St went for $174m.

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