Senior executives from global property services company Knight Frank and its New Zealand associate Bayleys Realty Group are promoting the Investment New Zealand portfolio in Hong Kong, Shanghai, Guangzhou, Singapore and Kuala Lumpur until tomorrow Friday 18 October.

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 a shopping centre in Auckland as well as two recently completed retail developments in a new mixed use waterfront precinct in Auckland’s CBD.Other offerings include off market office investment opportunities as well as commercial and industrial investment development sites, high end apartments and a large avocado orchard on a stunning waterfront site. A portfolio of nine hotel offerings will also be presented to investors with an interest in this sector of the market.

Mr Johnson 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.

Paul Henley, Knight Frank’s Australian Partner, 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 of five million people 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 remained 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.”

Mr Henley 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,” Mr Henley says.

Ryan Johnson says New Zealand commercial property market attracted more than NZ$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 NZ$20 million.

He says the scale of purchases being made by large institutional investors like Blackstone, GIC, Investec, PSP Investments, Invesco 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 NZ$635 million (US$400million) sale 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,” says Mr Johnson.

Source: Knight Frank