Westgate Lifestyle Centre, outlined in blue, was this year's first-half largest retail sale, going for $85.7 million. Photo / Colliers
Westgate Lifestyle Centre, outlined in blue, was this year's first-half largest retail sale, going for $85.7 million. Photo / Colliers
Sales of $1.27 billion of commercial, industrial and retail property were made in this year’s first six months, according to CBRE, but that was down 25 per cent on the previous half.
The NZ investment market overview released by research head and executive director Zoltan Moricz recorded 59 non-residential salesin Auckland, Wellington and Christchurch from January to June.
That is down $374 million compared with the previous six months to last December, when $1.65b worth of deals were done.
Lower sales volumes reflected buyers’ below-average levels of liquidity, exacerbated by the “continued stickiness of a wide bid-ask gap”.
The industrial sector was more active than commercial. Private investors were the single most active category. Overseas investors were mainly wealthy individuals, not companies, and from Australia, Asia and Europe. They spent $93m in this year’s H1.
CBRE's investment monitor compares half-yearly periods back to 2011 to measure property sales activity. Chart / CBRE
Syndicator Mackersy Property made the biggest single industrial deal in this year’s first half, buying a logistics warehouse at 11 Ross Stevenson Rd, Drury, CBRE said.
That was one of two deals by syndicators which spent $100m in the latest period.
Overall, the largest deal was Fisher & Paykel Healthcare’s $275m purchase of land at 300-328, 350, 270 and 458 Karaka Rd, Drury for its new innovation hub, where thousands of people will work.
Who got that $275m? A title search showed one of the properties was previously owned by Van Den Brink Meadows. Another was previously owned by Karaka Road Estate, whose directors include tomato supplier Brett Wharfe of NZ Hothouse. Those close to the deal say a Van Den Brink family member and Wharfe received the money.
In May, the Overseas Investment Office said F&P Healthcare was allowed to buy 104 hectares from New Zealand business Karaka Meadows. Clearance was needed because although the NZX-listed company is 34 per cent New Zealand-owned, 32 per cent is in Australian hands, 15 per cent American, 15 per cent British, and the rest is owned by other overseas entities.
F&P Healthcare said last September it planned to grow substantially via the land deal. It is part of the group, headquartered here since 1969.
CBRE’s latest investment monitor said that land sale made up a substantial portion of all the deals done in this year’s first half.
The biggest retail deal was Kiwi Property’s $85.7m sale of its Westgate Lifestyle Centre to a joint venture between Harvey Norman and Rod Duke of Briscoes/Rebel Sport, CBRE said.
The $3b landlord Kiwi sold that centre at NZ Retail Property Group’s new town hub on a site opposite the $100m-plus Costco Warehouse on the city’s northwestern outskirts. Real estate agency Whillans Realty Group head Bruce Whillans said his business had closed the sale.
Kiwi chief executive Clive Mackenzie said at the time a joint venture bought the property: half Harvey Norman and half interests associated with Rod Duke.
Bruce Whillans and Colliers international sales director of capital markets Richard Kirke were contracted to sell the centre. Whillans brokered it. Expressions of interest were due by last November, and Kiwi cited the sale when analysts asked about the $1b that the company had borrowed in a conference call after its full-year result this year.
CBRE said most of this year’s first-half $1.2b real estate transactions were in Auckland, accounting for $1.08b worth of deals. Just $140m were in Christchurch and $50.3m in Wellington.
Auckland had 43 asset sales, of which 14 were above $20m. Christchurch had 13 sales, including an industrial asset bought by Calder Stewart for $30m. Wellington’s largest deal was the sale of 22 The Terrace by Stride Property for $29.3m.
Syndicates are bigger buyers than institutional purchasers.
60 Cashel St, Christchurch: the PwC Centre.
CBRE didn’t mention it, but trouble has arisen in the syndicate market, particularly with Albany’s Maat Group, which has suspended repayments from many funds. For example, shareholders who bought into a proportional ownership scheme for Christchurch’s PwC Centre via a company managed by Maat had their projected 6.5 per cent annual return cut to zero - just one of four with suspended returns, the boss says.
Neil Tuffin of Maat said in August that risks were clearly outlined in product disclosure statements for all such schemes sold to retail investors, and therefore those investors had received information about what could happen.
CBRE said since 2006, syndicates had accumulated $4.3b of property, compared to $2.9b by institutions.
But private investors are still the biggest buyers overall, purchasing $28b of property in New Zealand since 2006, even though in the latest half-year, they were net sellers, buying $639m of property but selling $790m.
Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.
