Asian roadshow puts spotlight on New Zealand property

Asian roadshow puts spotlight on New Zealand property

Senior executives from Bayleys Realty Group and its international partner Knight Frank will be promoting the Investment New Zealand portfolio in Hong Kong, Shanghai, Guangzhou, Singapore and Kuala Lumpur from October 14-18.

Bayleys’ national director commercial & industrial Ryan Johnson says a variety of properties that are likely to appeal to international investors are featured in the portfolio. These include the Meadowlands shopping plaza in Howick, as well as two recently completed retail developments in Auckland’s Wynyard Quarter.

Potential hotel development sites are also being presented to investors with an interest in this sector, with other offerings including commercial and industrial development sites and one of New Zealand’s largest avocado orchards in the Bay of Plenty.

Johnson says he and other members of the Bayleys’ international sales team, David and Chris Bayley and James Chan and Paul Dixon, from Bayleys’ hotel and tourism division, will be meeting with Knight Frank clients as well as long standing clients on Bayleys’ substantial South East Asian database built up over the past 30 years.

He says the Investment New Zealand portfolio will also be promoted in Australia in conjunction with Knight Frank and through Knight Frank’s private wealth division, based in London, which services high net worth individuals who represent a significant and growing proportion of investors in the commercial property sector globally.

Neil Brookes, Knight Frank’s Head of Capital Markets, Asia Pacific says while the New Zealand property market still has a relatively low profile internationally, global investors are increasingly awakening to the attractions of the country’s commercial real estate.

“With its highly-attractive income yields and total property returns which exceed those on offer in most mature markets across North America, Europe and Asia, this small South Pacific nation is looming ever-larger on the radar of international investors.

“In a global context, the country’s returns on commercial and industrial real estate are both attractive and resilient. Annualised total returns have consistently averaged above 10 percent over a one, five and 15-year period, according to valuation data from MSCI which monitors returns from commercial real estate markets around the world.”

Brookes says other factors attracting investors to New Zealand include the absence of stamp duty and capital gains tax, a straightforward land title system, stable political and business environments which welcome foreign investment and a lack of corruption. The New Zealand economy, while slowing in line with global trends, is still outperforming that of many other countries, including Australia.

“Combined with investors’ desire for greater global diversification, these factors are greatly expanding the pool of potential buyers of New Zealand assets and presenting new opportunities for some of our clients,” he says.

Ryan Johnson says the New Zealand commercial property market attracted more than $6.7 billion of offshore investment in the five years to March 2019, with foreign buyers accounting for around half of all transactional activity for sales greater than $20 million.

He says the scale of purchases being made by large institutional investors like Blackstone, GIC, Investec, PSP Investments, Invesco, Macquarie Bank and Credit Suisse, as well as an increasing number of high net worth individuals, underlines the growing confidence in the New Zealand market among international investors.

The largest transaction involving an offshore purchaser recently has been the $635 million sale by Goodman to Blackstone of a portfolio of seven office buildings in Auckland’s CBD, tenanted by high profile local and global firms including Bayleys which is managing the portfolio.

“Other global investors certainly take notice when the world’s largest real estate private equity investment firm outlays this sort of money in New Zealand,” Johnson says.
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