Commercial real estate buoyant

PORTFOLIO: The five-storey Pukaki Centre was sold last month to an overseas investor. PHOTO/SUPPLIED

The commercial building market in Rotorua is looking "buoyant", according to some local real estate companies.

Rotorua Bayleys Realty commercial salesman Mark Rendell said there was strong interest in the city centre, with his agency last month selling the five-storey Pukaki Centre - the last piece of Rotorua Energy Trust's property portfolio.

Mr Rendell said the building was sold to an overseas investor who bought the property without seeing it in person.

"We sold the Pukaki Centre [last] month by tender to an overseas investor. We had a bit of inquiry, the building has good quality tenants in there and it's fully tenanted. There is the Ministry of Education in there, solicitors, the Lakes District Health Board. There was dedicated car parks and the building was nicely presented with natural light," Mr Rendell said.

"Anything tenanted is getting really strong demand and inquiries. Interest rates are low at the moment and investors are seeing a better return and capital gain here. [Interest] has picked up, it's been strong. Last year, we had the Redwood Centre and, earlier in the year, the complex on Fairy Springs Rd - it's just a matter of finding new stock.

"We have a slightly better return [in Rotorua] than Tauranga," Mr Rendell added.

"If you place your money here you are likely to get more income per year than Tauranga, as the market is more competitive."

Mr Rendell said the tourism market and the busy industrial and forestry sectors contributed to attracting investors.

Harcourts Rotorua commercial sales and special projects consultant Paul Sanford said he was also seeing strong demand.

"Without question. Our problem is getting the stock. There is stock coming on to the market but, at the moment, the problem is we have more prospective purchasers than stock," Mr Sanford said.

"There is the odd overseas purchaser recently but there is still local interest as well so it's a combination. It is buoyant in comparison to last year - not only in the sales business but in the leases too, in all categories.

"There's nothing to say it won't continue."

Professional McDowell Real Estate commercial saleswoman Nadia Christensen specialises in leasing properties and is seeing more businesses wanting to be based in the main streets of the CBD.

"June and July have been fantastic," she said. "We have just leased [the former Rotorua Gift and Jewellery Centre] on Tutanekai St, an art gallery is going in there. People are wanting to be in the CBD more, they are wanting more exposure and there is a general consensus that people want to see Rotorua thrive."