Local investors lead landmark buys

5:00 AM Saturday December 6, 2014 Colin Taylor

The SAP Tower at $151 Queen St sold to Robert Jones Holdings.

New Zealand buyers were responsible for three of four recent high profile Auckland CBD sales valued at more than $200 million dollars that have been completed by Colliers International’s corporate and institutional sales team.

The three major CBD local purchases were: the sale by Precinct Properties of the SAP Tower at 151 Queen St to Robert Jones Holdings for $97 million; the sale by Shortland Management of the General Building at 29-33 Shortland Street to a private Auckland investor for an undisclosed sum; and the purchase by Mansons TCLM of the 4258 sq m New Zealand Herald site at 46 Albert Street from interests associated with Steve Owen.

The fourth recent major sale by Colliers, on behalf of Viaduct Harbour Holdings, was of a 9793 sq m block of freehold land in the Wynyard Quarter to the Australian based Goodman Group for $40.1 million.

Peter Herdson, national director, corporate and institutional sales, for Colliers says it is encouraging to see local investors competing at the premium end of the commercial property market.

Herdson, whose team comprises colleagues John Green, Andrew Reed, John Goddard and Jason Seymour, says the sales in the final quarter of 2014 prove that Auckland remains a key focus for local premium property investors.  

“Given the unprecedented levels of overseas money currently being deployed into New Zealand, these latest sales certainly buck the trend of offshore investors dominating high-end purchases here.”

Andrew Reed, international director of capital markets, says strong fundamentals including low interest rates and investor appetites are responsible for this flurry of local interest that is competing with the offshore investors from Asia and Australia.

 “Global capital views New Zealand as a strategic diversification play, but also, importantly, as an attractive investment market,” Reed says.

He says that more than half the $2.6 billion worth of commercial property transacted in New Zealand this year with an individual sale price above $2 million was sold to overseas interests.

True Commercial - 29-33 Shortland Street, General Building - exterior.jpg

The General Building at 29-33 Shortland St was sold to undisclosed private Auckland buyer. 

“While we have seen several notable transactions recently in the Auckland CBD to these investors, most international investors attracted to Auckland are still looking for assets characterised by long leases, relatively new buildings and blue-chip tenants.

“As this interest continues, and global markets change, international investors will continue to look at further opportunities here.”

Reed, who sold the distinctive SAP office building with Herdson and Goddard, says commercial property of this quality is becoming more difficult to acquire even on a global scale.

Herdson says research-based predictions illustrate why interest from both offshore and local buyers is so strong. “Auckland prime office rents are tipped for the strongest annual appreciation out of all sectors and locations in New Zealand - up a forecast six per cent over the next 12 months,” he says.

Green, director, corporate and institutional sales, for Colliers who sold the Albert St property, said there was a lot of interest, from both off-shore and other local investors, but they were not able to move as quickly as Mansons.

“The location bordered by Swanson St, Albert St, Mills Lane and Wyndham St, is one of the few remaining large development sites in the CBD,” says Green.

Seymour, Green, and Reed and brokered the sale of the fully-leased nine-level, character General Building. The early 20th century Chicago-styled building is home to several leading professional businesses and dominates the corner of Shortland and O'Connell Streets.

“We saw strong local and offshore interest with several parties vying for the opportunity but in the end it was a fast moving local investor that was successful,” says Seymour.

Green, who worked with Herdson and Reed on the sale of the Wynyard Quarter block, says Goodman Group was the only overseas buyer in the four big recent sales

“The land is bounded by Beaumont St, Gaunt St, Daldy St and Pakenham St West where the group has plans for a mixed use development of about 45,000 sq m.”

Green says the transaction represents one of the highest prices paid per square metre for land in Auckland’s Wynyard Quarter, due to the rare, freehold nature of the offering and the ability to incorporate a substantial development on the site.

“Again we saw significant local and offshore interest in this site due to its outstanding development possibility,” he says.

True Commercial - Peter Herdson, Colliers.jpg

Peter Herdson of Colliers