THE New Zealand commercial property market has made complete turnaround, prompting investors to believe it is the time to buy.
According to the Property Council / IPD Property Index, the sector recorded a total return of -3.54% for the 12 months to September 2009 – compared to just 12 months ago where total returns were 10.7%.
Property Council of NZ CEO Connal Townsend said the market seems at or near the trough so it is not surprising that many astute investors are seeing this as a timely opportunity to acquire real assets at value prices.
And IPD director John Garimort said investment managers have been vigilant in ensuring that their portfolios have been marked to market.
The CBD office sector was the worst performer with -6.41% return, the fall was largely due to negative capital return of -12.96% which offset 7.44% in income return.
The retail property market delivered a -3.81% return and again capital return was -10.46% which offset 7.36% in income return.
However, the industrial property sector remained resilient. Despite capital return of -5.57%, this was offset by a strong 8.47% income return which help give the sector an overall return of 2.46% for the year.
Geographically, Auckland CBD offices faired the worst with a total return of -8.88%. While Auckland’s running yield of 7.42% is line ball with Wellington CBD offices at 7.44%, capital returns for Auckland were -15.26% compared to Wellington’s -10.83%.
Within the office markets, higher quality properties have faired better than the lower grade investments represented in the market.
Propertyreview.com.au
