Optimism across the country

Confidence in commercial property investment has hit a two-year high, according to Colliers International’s latest survey.

The real estate services firm’s confidence survey for the December 2018 quarter reveals a net 26 per cent of more than 1600 respondents were positive. The pessimists are subtracted from the optimists to get a net figure.

That was the highest in two years, Colliers said, and 7 per cent up on a year before.

The optimism was spread across the country with 10 of the 12 regions surveyed significantly or strongly positive.

Brimming with optimism were investors in Tauranga, Queenstown, Wellington, Auckland, Nelson and Hamilton.

Standing out for the wrong reasons were two areas where confidence was low: Christchurch at a net negative 1 per cent and Whangarei at a net negative 7 per cent.

Tauranga/Mt Maunganui took the top spot at a net positive 57 per cent with Queenstown slipping to 46 per cent, ending its run as the most confident region for commercial property investment for 15 consecutive quarters, almost four years.

Investors said government policy was one of the largest influences on investment fortunes.

Overall, confidence in retail was lifting too and rose to a net positive 4 per cent while confidence in industrial property flourished in the main regions posting a net positive 46 per cent.

In the capital, investor confidence rose to a net 41 per cent. In the office sector, vacancies are very tight in the CBD while retail confidence lifted.

Colliers said it expected rents to increase 3 per cent a year over the next few years for prime and goodquality secondary offices in Wellington.

It also enjoyed a buoyant industrial market. A shortage of industrial land was limiting what could be developed but Colliers said new transport links, like Transmission Gully, along with other infrastructure projects like the Whitby and Waitangirua link roads, would bring new development opportunities.

In Christchurch, investors in industrial property were buoyant but they remained down on office and retail investment.

The good news is that investor confidence in Christchurch has clawed its way back to near positive territory at a net negative 1 per cent, compared to a net negative 10 per cent a year earlier.

Colliers forecast Christchurch rents to stay much the same this year. The city would continue to see solid investment from locals, and from North Island and overseas purchasers.