Auckland commercial property spike leads to $1.1b of sales in three months: report

The US fund Invesco recently bought a 50 per cent stake in the ANZ Centre on Albert St, part of $1.1b worth of commercial property sales in Auckland over the past three months. Photo / Supplied

While Auckland's housing market may be flat, demand for business properties remains hot with a large spike in sales over the past year.

Analysts CoreLogic report that 156 business properties sold for a total of $2.1 billion over the 12 months to August.

This was more than double the $908 million worth of business property sales made during the same period the year before.

Much of the boom in sales came over the last three months, when 52 business properties sold for $1.1b, including one sale worth $635m.

This was a big jump on earlier this year when 37 properties sold for $342m in the three months to May, and when 45 properties sold for $330m in the three months to February.

"It's important to note that one or two 'trophy' sales have bolstered the overall total," CoreLogic senior research analyst Kelvin Davidson said.

"But the upwards trend is still pretty clear, and consistent with reports of interest in the NZ market from cash-rich syndicates and fund managers, both domestic and offshore."

The growth in business sales comes at a time when Auckland's housing market has remained flat for close to two years.

Figures by listing website Trade Me today showed the average asking price for an Auckland home in August had fallen 0.1 per cent compared to a month earlier to hit $895,050 - the lowest price since September 2017.

By contrast, Auckland's commercial property market was prone to far greater fluctuations, caused by whether or not an expensive property came up for sale, Colliers director research and communications Chris Dibble said.

Highlighting this was one sale last month valued at $635m in which three Auckland central properties sold together as part of a deal, CoreLogic reported.

The sale included the six-storey Viaduct Corporate Centre at 85 Fanshawe St, six-storey Microsoft Building at 22 Viaduct Harbour Avenue and five-storey KPMG Centre at 71-79 Fanshawe St.

Another notable deal in August led to a 50 per cent stake in the 42-floor ANZ Centre concrete tower at 23-29 Albert St in Auckland central selling for $181m.

The six-storey Spark City Building C at 167-191 Victoria St West in Auckland central also sold for $77m.

Despite fluctuations in the market, Dibble said overall investor confidence was buoyant for Auckland CBD properties.

"We have recently seen an uplift in investor confidence from offshore groups purchasing New Zealand and Auckland assets based on strong underlying fundamentals in regards to economic and demographic conditions," he said.

He said strong investor interest meant a number of building owners were weighing up whether to hold on to their assets, or "release the capital for other opportunities".