Vote brings market optimism
As New Zealand's political landscape undergoes changes, Barfoot & Thompson Commercial manager John Urlich says there is already a palpable sense of optimism in his organisation’s clients and customers.
New Zealanders are resilient and the sense we get is that businesses are adapting and getting poised for what may eventuate, he says in his foreword to the new edition of the company’s Insite portfolio. “Interest rates may continue at present levels for longer and global tensions may be elevated, but the recent predictability of headline inflation has us believing that fiscal policy and funding costs will remain priced in.
“This serves primarily the occupier market. However, astute investors would do well to consider some of the many addvalue propositions that abound at present. Fortune will favour the counter-cyclical investor in the near term,” Urlich says.
On the opposite side of the commercial investment equation, cash flows are improving. “Our leasing market continues to see strong transactional activity. Prime space has the least vacancy in the office sector and improving retail numbers has seen improved leasing in both the Auckland CBD and suburbs.”
The real upward pressure on rentals has been within the industrial sector, Urlich says. “New-build industrial rentals are exceeding $200 per square metre across the board and vacancy rates remain at alltime lows.
“The simple reality is that Auckland does not have the necessary availability of industrial land. This is unlikely to change.”
Urlich says it always pays to remember that the fundamentals of continued low supply of land, labour and building materials, that are unique to Auckland, will make commercial property one of the most strategic requirements for any business going forward.
“Situational aspects are dynamic and change with time, both in New Zealand and globally,” he concludes.