The $3.8b splurge: Biggest commercial property sales of the year revealed

Precinct is selling a half-share in its ANZ Centre on the Albert St/Swanson St corner. Photo/file

Commercial property sales of $3.8 billion have been recorded so far this year, driven mainly by syndicators and strong overseas interest, according to a new study out this month.

The report from Colliers International noted a "strong surge" in office sales this year which it said had been driven by syndicators and strong overseas bidding.

The overall figure only takes into account assets with a value of $5m or above, and showed a slight decline compared to the $4b recorded in 2017.

Colliers said this year's biggest commercial sales were:
• The planned sale of the ANZ Centre, 23 Albert St (a 50 per cent stake) to United States fund Invesco for $181m;

• The sale of the Central Park Corporate Centre to Oyster and joint venture partner, KKR for $209m;

• Goodman selling its VXV portfolio to Blackstone Fund for $635 million.

On June 29, NZX listed Precinct Properties announced that it had entered a binding agreement to sell a half-stake in the ANZ Centre in the city's CBD for $181m, subject to Overseas Investment Office consent.

The sale of the ANZ Centre followed the 2013 upgrade of the building, which totalled $76 million in costs.

The Fonterra headquarters on Fanshawe St, sold to Blackstone.

Also on June 29, NZX listed Goodman Property Trust announced the settlement of the Central Park property at Greenlane in Auckland.

On May 18, Goodman announced it was selling is VXV office portfolio in the Wynyard precinct. Seven blocks were involved in that deal: The KPMG, Auckland Transport, Microsoft and HP, Fonterra Centre, Bayleys House, Datacom and Air New Zealand buildings.

Blackstone Asia chairman Chris Headley said a few weeks ago: "This portfolio is Blackstone's first office portfolio acquisition in Auckland and presents an opportunity for our investors to have a meaningful exposure to high-quality assets in a strong, resilient office market."

The office market remains resilient. Graphic/Supplied.

The Colliers' report said such big deals were driven by investor optimism and due to a shortage of prime stock availability, leading to rental uplifts for landlords.

"Prime average yields have also reached record low levels in Auckland [5.5 per cent] and Wellington [7.5 per cent], the lowest since the global financial crisis. Impressively, Christchurch reached record low yields historically at 6.6 per cent in June 2018," the report said.

Colliers welcomed changes to the Government's foreign buyer ban, noting Singapore would join Australia as exempt and expressing satisfaction with big changes on apartment sales to foreigners.

"The proposal now allows foreign buyers to hang on to apartments or houses bought off the plan, given that it is part of a development of 20 or more units. Foreign buyers would still not be allowed to purchase existing standalone homes," the report noted.