Biggest Christchurch commercial office sale

One of the two buildings sold was this one at 14 Show Place, Addington.

In the biggest commercial office sale in Christchurch this year, Hamish Doig and Mark Macauley of Colliers International have sold on behalf of Goodman Property Trust, two buildings largely occupied by insurer IAG's Christchurch offices in Addington.

The two buildings fetched $33.2 million, representing a 7.8 per cent yield and were bought by a group of Queenstown investors led by lawyer Ron Mackersy.

The IAG building at 12 Show Place and the gym and café at 14 Show Place have a total net lettable area of 7881 sq m and IAG has a nine year lease expiring in 2025 with further rights of renewal.

The unconditional sale is expected to settle on November 25.

Doig says the properties in Show Place attracted immense interest because of the quality property and tenant.

"This is just the sort of property that investors are seeking. In this instance, the buyers wanted the buildings to add to a small portfolio, which included two retail sale and leasebacks to The Warehouse - making a nicely diversified portfolio at an attractive yield. There's considerable interest in Christchurch commercial property - both from local investors but also throughout New Zealand and syndicates are increasingly active.

"With bank interest rates at low levels, commercial property remains a highly attractive alternative."

Show Place is a premium campus style estate, comprising 25,000 sq m in total of modern office accommodation with a range of on-site facilities.

Andy Eakin, Chief Financial Officer of Goodman (NZ) Limited, says the sale is in line with the trust's asset recycling programme.

"Ongoing asset sales are currently the preferred source of funding for new development activity. It's a successful and sustainable approach that is improving the cash earnings of the Trust while enhancing an already high quality property portfolio."