A billion dollars of deals

A billion dollars of deals

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, Colliers’ Capital Markets National Director.

“This is a significant milestone for the team and reflects both the strong commercial property market and the team’s dominance in the area of significant commercial property transactions in New Zealand.

“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 the 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 for an aggregate purchase price of NZ$549 million - the largest transaction in the company’s history.

ASX-listed company Scentre Group sold the three shopping malls in Lower Hutt, Hamilton and Auckland, with the Ladstone Holdings group of companies acquiring Westfield Glenfield, while a fund managed by Stride Property Ltd, called Diversified NZ Property Fund Ltd, purchased Westfield Queensgate and Westfield Chartwell - subject only to approval of the Overseas Investment Office.

“This 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.

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, says Herdson.

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

“It was a particularly satisfying result given it was a true team effort involving a total of ten 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 approximately 18 years.

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

Another significant transaction in the past six months was the sale of Fletcher Buildings’ Penrose headquarters for $80 million, says Capital Markets International Director Andrew Reed.

“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.

Herdson says the number of landmark deals confirms 2015 as an outstanding year for commercial property.

“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 of Herdson, Goddard, Reed, John Green and Jason Seymour have worked together for more than eight years, focussing on major office and retail capital transactions.

ENDS

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