A billion dollars in deals in six months

5:00 AM Saturday December 12, 2015 Colin Taylor

The Queensgate Westfield was one of the big ticket sales by Colliers International’s capital markets team.

Colliers International’s capital markets team has sold more than a billion dollars in transactions in just six months.

“The last time a similar sales volume was achieved was over the entire year of 2012 – when the team transacted $970 million in deals,” says Peter Herdson, national director of capital markets for Colliers.

“This is a significant milestone for the team and reflects both the strong commercial property market and the team’s sterling performance in the area of significant commercial property transactions in New Zealand,” Herdson says.

“The Property Council New Zealand/IPD New Zealand Quarterly Property Index for the third quarter of this year shows returns on New Zealand commercial property are at the highest level in more than seven years – and the level of transactions completed by our capital markets team indicates sales levels are also at an all-time high.”

John Goddard, capital markets director says the team’s transactions tipped over the billion-dollar mark following last month’s sale of three major Westfield shopping centres (NB: see adjoining story on this page).

“The Westfield sale came only two months after the previous largest deal in the company’s history – the sale of Antipodean Supermarkets Limited’s portfolio of 19 supermarket properties to Stride Property Limited for $287 million,” Goddard says.

Herdson says the supermarkets’ sale was the biggest portfolio offering of institutional grade supermarket properties in New Zealand, and one of the largest in the Asia Pacific region.

“The portfolio had a combined net lettable area of 71,896 sq m and a passing income of about $18.7 million.

“It was a particularly satisfying result given it was a true team effort involving a total of 10 Colliers International and Australasian offices in the marketing and negotiations.”

Colliers was also involved in working with the vendor and Progressive Enterprises to restructure the existing leases, with the majority of premises subject to 20 year leases. This resulted in a portfolio weighted average lease term (WALT) of around 18 years.

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Countdown Invercargill was one of 19 supermarket properties in a portfolio sold by Colliers.

Herdson was very impressed at the amount of offshore interest generated via Colliers’ network of international offices for both the Countdown and Westfield portfolios.

Andrew Reed, capital markets international director for Colliers, says another significant transaction in the past six months was the sale of Fletcher Buildings’ Penrose headquarters for $80 million.

“Despite multiple bids being received from Australia, Asia and the USA, the 2.2 ha property, with a 20 year lease-back to Fletchers, sold to an onshore private investor..”

The team also sold a 7770 sqm shopping centre development at Westgate in Auckland, known as Zone 7, to property fund Kiwi Property for $82.5 million.

Developed by the New Zealand Retail Property Group, the centre is due to open in March next year (2016) with 28 shops and 622 car parks.

“The number of landmark deals confirms 2015 as an outstanding year for commercial property,” Herdson says.

“Over and above the deals already mentioned, our capital markets team has been directly involved in more than $250 million worth of other major transactions across New Zealand this year. Significant deals include $80 million of sales in Wynyard Quarter to purchasers including Willis Bond and Precinct, Heartland House in Newmarket for $17 million and more than $30 million of The Warehouse sale and leaseback transactions.”

The capital markets team comprising Herdson, Goddard, Reed, John Green and Jason Seymour have worked together for more than eight years, focusing on major office and retail capital transactions.

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(From left to right) Peter Herdson, John Goddard, and Andrew Reed of Colliers International.