Commercial property investors remain positive about the market despite the potential impacts of a proposed capital gains tax, according to a quarterly confidence survey from Colliers International.

Agency research and communications director, Chris Dibble, says this shows a net positive 22 per cent (optimists minus pessimists), of respondents expect investment conditions to get better over the next 12 months.

"This is broadly in-line with the last four quarters," says Dibble.

The survey, which has about 1600 responses, was taken while the merits of a capital gains tax denominated the news.

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It coincided with the release of Tax Working Group Future of Tax report, whose suggested reforms included a CGT.

But no distinguishable shift in trends was recorded during the survey period; with 10 out of the 12 regions surveyed recording a net positive score.

"While the Tax Working Group's recommendations could have far-reaching impacts for the commercial property sector, if implemented, our survey shows investors remain broadly positive about conditions in the year ahead," says Dibble. He adds that the working groups recommendations are only proposals, and — even if they became reality — any tax changes wouldn't be introduced till 2021.

Other findings from the Colliers' confidence survey

• Queenstown remains the top spot for commercial property investor confidence, eclipsing Tauranga/Mt Maunganui in the previous quarter. It recorded a net positive 52 per cent — up 6 percentage points on the December 2018 quarter. Otago managing director, Alastair Wood, says population and tourism growth is still underpinning confidence within the Queenstown commercial market, with significant investment forecast in both infrastructure and construction over the next decade. "The Queenstown lifestyle and strong historic capital gains combine with chronic supply constraints to maintain optimism in the market."
• Tauranga/Mt Maunganui was just 1 percentage point behind Queenstown, recording a net positive 51 per cent. Tauranga MD, Simon Clark says 2019 started with a real bang. "We're seeing record prices for quality investments, with yields in the 4 per cent to 5 per cent range being achieved from investors from all over the country. I think this year Tauranga will remain in high demand from investors who find it a safe-haven for their funds, with strong population growth and a booming regional economy."
• Wellington took out third place in the survey overall, with a net positive 43 per cent, followed by Auckland (32 per cent) and Hamilton (30 per cent). The office sector was the stand-out in the capital, where tenant demand remains high and vacancy rates are low, despite premium new stock coming onto the market. Wellington MD, Richard Findlay, says the Wellington office and industrial markets are continuing to tighten with vacancy rates across both sectors at historically low levels. "Owners are obtaining strong rental uplift when rents are reviewed, helping deliver better than expected property returns. The growing premium office stock is seen as a positive in a tight A and B Grade office market where tenants are demanding more from their buildings and using space more intensively," says Findlay.
• Napier/Hastings had a standout result with a net positive 24 per cent – the highest on record since the survey began almost a decade ago. The result was up 9 percentage points on the previous quarter, and a noteworthy 14 percentage points up on the same time last year.
• Christchurch recorded a 15 per cent net negative score, with pessimists outweighing optimists. However, 45 per cent of respondents in both the office and retail sectors were neutral, indicating they expect current positive investment conditions to remain steady. The industrial sector remained a top performer. In Auckland and Christchurch, respondents were most optimistic about industrial properties.
• In the Wellington and Christchurch retail sectors, pessimists outweighed optimists. However, 47 per cent and 45 per cent of respondents respectively, expected conditions to remain steady.
The survey drew on 1,598 responses.