Land, prestige retail attracts buyer interest
Colliers’ Capital Markets team has transacted over $ 1 billion of property this year, which the company says firmly establishes it as the leader in this sector of New Zealand’s property market.
Key asset classes that have drawn interest in 2023 have been land, which has accounted for sales of around $ 200 million, and premium retail properties with an add- value offering.
Data released earlier in the year by MSCI Real Capital Analytics, the go- to universal data and analytics solution for global commercial real estate investing and transactions, noted Colliers had a 43 per cent market share on major investment transactions during the first half of 2023. The nearest competitor had 22 per cent.
Colliers transacted more than $ 619 million of property during that period with the Capital Markets team contributing a range of notable deals.
The team’s 2023 success followed a strong finish to 2022, which included the $ 240 million sale of 40 and 44 Bowen St, Wellington, led by Richard Kirke, Colliers’ international sales director of Capital Markets.
Land deals in 2023 included the $ 68 million sale of Spedding Road premium industrial estate in Whenuapai, the original sale of the large- scale site successfully rezoned to Business– Light Industry earlier this year. The sale took approximately five years to negotiate.
Since that transaction, Colliers has taken the development to market and Property For Industry Ltd announced in October that it had entered a conditional contract to acquire approximately 5.8ha of land there for $ 40.565 million.
Josh Coburn, Colliers’ director of Site Sales and Capital Markets, says industrial land remains in short supply across Auckland, driving continued demand.
“Land has reset itself from a price perspective to a level where buyers see value. The site at Spedding Road is the only bare industrial land available in the north and west of Auckland at such a scale.
“From a residential development perspective, land that has potential for highend apartments continues to receive strong interest, but these sites are generally located in affluent suburbs or offer prime waterfront views.”
Some of the retail properties transacted by the team have included a sale and leaseback to The Warehouse Group for The Warehouse at 100 Pah Rd in Royal Oak, which was keenly bid, a neighbourhood shopping centre in Stoddard Rd, Mt Roskill, for $ 36.76 million, and Countdown in Ma ¯ ngere for $ 33 million. Westgate Lifestyle shopping centre in West Auckland sold for $ 85.7 million in April.
Blair Peterken, Colliers’ director of Capital Markets, says there were clear requirements for buyers when pursuing these assets.
“The opportunity to add value and either intensify the usage of the site or optimise the value from the property was a common theme,” Peterken says. “The Countdown in Ma ¯ ngere was an excellent example given there was ancillary retail on the landholding.”
The medical sector has also proved popular and the sale of the Apollo Health & Wellness Centre on Auckland’s North Shore for $ 27.5 million drew strong interest in the market. It was a split- risk investment and medical facilities are expensive to develop from scratch.
Peter Herdson, Colliers’ national director of Capital Markets, who celebrated 30 years with the firm this month, says the team has signed a number of agency agreements to bring a broad range of properties to the market in early 2024 that will catch the eye of investors.
“With the alignment of expectations and levelling of interest rates, we expect New Zealand will remain an attractive destination for local and international capital and foresee a rise in transaction volumes in the early stages of the new year.
“Private buyers have emerged following a period of inactivity and purchasers can work out their pricing structures with better clarity as yields have stabilised.”
Article supplied by Colliers