The year 2016 had been a stellar year for the commercial property market and across all sectors—commercial, retail, and industrial. It had been a year of achieving record yield in all sectors. And it wasn’t any different at Colliers, which has seen another record year in terms of revenue.
“Due to sustained demand and a strong economy, we see continued yield compression in the industrial, retail and commercial sectors, and record high office rentals being achieved in Auckland,” Colliers’s Auckland Director of Investment Sales, Gareth Fraser, said.
He believes that there is still a lack of alternative investment options to achieve comparable returns. However, a number of offshore buyers are expected to participate in the New Zealand market, its yields being among the most attractive within global mature markets.
Colliers’s Investment Sales Broker Gawan Bakshi says that a shortage of properties with good fundamentals is likely to carry on in 2017.
“Construction will climb towards the top of the graph. Off the plan apartments are likely to be seen on market in abundance in residential market. New retail units in earmarked suburbs such as Pukekohe, Drury, Beachlands, and Whenuapai are likely to attract investors looking to invest in commercial property.” He believes that the Indian community is one of the most aware among investors.
“Indians as a community are astute investors [who] are consciously aware what they are looking for in an investment. They are dominant throughout New Zealand—where they want to invest and in what type of property. They are not particularly placed in any one spot or sub-category of property,” Mr Bakshi added.
Colliers believes that in the coming year, the banks are expected to be more selective with the lending, resulting in a tighter supply of debt, which could further lead to an increase in lending from international and domestic non-bank sources/institutions.
“We expect a continued increase in the number of cranes on the Auckland skyline, driven by the demand outweighing supply in a positive business environment; expansion is needed. We think a potential impact of the recent South Island earthquakes will be driving investment into the golden triangle area of Auckland, Bay of Plenty, and Waikato,” Mr Fraser added.
According to him, the property market’s growth rate is likely to not decline in 2017, considering the current political and social scenario. However, the reduced availability of debt might slow down the volume of sales, eventually. He believes that in the short-term, there is still strong equity in the market.
Mr Fraser says it is important for first-home buyers or small to medium enterprises (SMEs) to research the market well to make sure they get the best deal rather than regretting later.
“Research your market actively. Partner up with good advisers (legal, accounting, technical due diligence, etc.) so that you can move quickly to secure an opportunity when it arises. Get to know good agents in the area you are interested in and keep yourself on top of their list of buyers,” he said.
While there are so many property advisors in the market, why should one choose Colliers?
“Colliers International is consistently recognised as a leader in the New Zealand commercial property industry. We achieve this not only through the delivery of outstanding results but [also] through the peer recognition of receiving high-profile industry awards and accolades, such as, for the sixth year running, RICS once again named Colliers International as New Zealand’s top commercial agency for sales worth $5 million or more across all three sectors—commercial, industrial, and retail,” Mr Bakshi said.
He added that he provides any help or guidance regarding leasing, and listed a few must-haves for those planning to lease a property for the first time
- A good commercial property agent
- Good lawyers and accountants’ advice are mandatory
- Get premises condition report before the tenant take on the premises and after the tenant vacate the premises (Colliers provide these services)
- In case of dilapidation, advice should be taken from your lawyer and clauses for such situations should always be added in lease agreements
Colliers International has 20 offices around New Zealand and provides services that include valuation, real estate management, corporate solutions, building consultancy, research and consulting as well as tenant representation alongside its sales and leasing agency business, which includes hotels, rural and agribusiness, and residential project marketing.