KEY POINTS:
Australian retirement schemes are preventing the $100 billion New Zealand commercial property market from slipping into the doldrums.
A report out yesterday said major Australian superannuation funds would continue to pour millions of dollars into our office blocks, propping up the sector in an economic downturn.
DTZ, international
property consultants with offices in Auckland and Wellington, issued Trans Tasman Capital Flows which said New Zealand would benefit from the trillions of dollars Australians were pouring into their retirement funds.
Those funds are investing here to get big returns. Growth in the amount of money from Australia would underpin strong demand for prime property investments in New Zealand, the report said.
Ian Mitchell, DTZ's Wellington-based national research director, said the funds had enormous firepower.
"Superannuation funds under management in Australia are forecast to double to A$2 trillion ($2.4 trillion) by 2012. Provided New Zealand's property market performs, it is likely it will continue to attract investor interest from Australia."
The Kiwi office investment market was worth more than $100 billion, the report found, and the Australian sector was worth $300 billion.
The Asia Pacific commercial property market was worth about US$4418 billion, DTZ estimated.
The strong performance of New Zealand's economy during the past nine years represented the longest period of continuous economic growth since the 1960s, DTZ said. Around $5 billion of New Zealand commercial property was being sold annually.
Earlier this decade, only about $1 billion of annual sales were recorded.
Around 62 per cent of recent sales are being made to New Zealanders. Australians are responsible for 30 per cent of the sales followed by Germans with 3 per cent, Singaporeans with 1 per cent and others, 4 per cent.
Australia's Goodman Group has been the largest investor this decade, DTZ found. John Dakin, chief executive of the Goodman Property Trust's manager, said his business had $230 million of assets in 2003 but $1.6 billion by March 31.
Christchurch-based Campaign Against Foreign Control of Aotearoa is an outspoken opponent of overseas entities owning real estate here. It says foreign owners now control 41 per cent of the sharemarket, up from 19 per cent in 1989.
While the Australians are showing confidence, many local real estate investors are selling. Rick Martin, one of Auckland's most influential developers, has put most of his development land up for sale.
Angus McNaughton of Kiwi Income Property Trust has noted a big jump in properties up for sale.
TOP TEN
* Largest investors in NZ commercial real estate since 2000:
* Goodman Group, controlled by Australians $776m
* AMP NZ, part of the Australian multinational $739m
* AMP Australia $505m
* Valad Property Group, listed on the ASX $409m
* AMP NZ Office Trust, managed from Australia $362m
* Multiplex, an Australian company $361m
* Dominion Funds of Auckland $296m
* ING, a Dutch-headquartered multinational $175m
* Companies owned by Sir Bob Jones $171m
* Orchard, managed from Asia $158m
