NZ Direct Property Market Posts Positive Annual Capital

New Zealand Direct Property Market Posts First Positive Annual Capital Growth Since June 2008

Direct property has recorded its first positive annual capital growth since June 2008 in the Property Council/IPD New Zealand Property Index to December 2010, posting 0.9 percent growth. The annualised total return for the year ending December 2010 was 9.4 percent, while annualised income return was 8.4 percent.

The index provides a broad measure of market performance for commercial property based on a sample of 345 properties with a value of NZ$8.2 billion. The index composition (by value) across sectors is office (43%), retail (32%) and industrial (22%).

The December 2010 result represents an improvement of 3.5 percentage points over the previous period, mainly caused by capital values moving into positive territory.

IPD Managing Director for Australia and New Zealand Dr Anthony De Francesco said the result reaffirmed an upward trend in returns since the trough in June 2009. “However, returns are likely to moderate with a softening in the macro-economy.”

Performance across property sectors

Annualised total return to December 2010 for the composite, retail and industrial sector indices stood at 9.4%, 11.3% and 9.1% respectively, representing a significant improvement over the previous period with property sector indicators reporting positive returns.

Improved capital return, which is now positive across the property sectors, drove the positive performance. While the retail and industrial sectors continue to deliver improved returns they are below their long-run averages.

Notes to editors:

The Property Council is a not for profit organisation that represents New Zealand's Commercial, Industrial, Retail, Property Funds and Multi Unit Residential Property owners, managers and investors. The Property Council represents all the forms of commercial property and property investment in New Zealand.

IPD is a global information business, dedicated to the objective measurement of commercial real estate performance. As the world’s number one provider of real estate performance analysis for funds, investors, managers and occupiers we offer a full range of services including research, reporting, benchmarking, conferences and indices. We operate in over 25 countries including most of Europe, the US, Canada, South Africa, South Korea, New Zealand and Japan. Our indices are the basis for the developing commercial property derivatives market and the most authoritative measures of real estate returns worldwide. For further information visit, www.ipd.com.

ENDS

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