Property

ARE plans delisting from NZX/ASX

24.1.23   Following consultations with the major investors, Auckland real Estate Trust’s board will be presenting to unitholders a proposal to delist the Trust. Investors will shortly receive a meeting notice for a General Meeting, which will occur in early March, to present and seek investors approval for the proposed delisting. The ASX and NZX have both approved the delisting of the Trust in principle, with the key conditions being; • That investors who hold small unmarketable parcels...

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Lift in multi-unit consents

13.1.23 There were 50,209 new homes consented in the year ended November 2022, up 3.2% compared with the year ended November 2021, according to Stats NZ. There were 28,364 multi-unit homes consented in the year ended November 2022, up 24% compared with the year ended November 2021. The number of stand-alone houses fell 15% to 21,845 over the same period. "Home consents remain at high levels mainly due to the continued rise in the number of multi-unit homes being consented," construction and...

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Window for borrowers open for now

13.1.23 "Those borrowing to buy their first or next home have six weeks of likely interest rate stability so now could be a good time to pounce," says Tim Kearins, Owner of Century 21 New Zealand. His comments come ahead of the Reserve Bank - for the first time in 2023 - reviewing the Official Cash Rate on 22 February. In its last review in November, it hiked the OCR by 75 basis points, taking it to 4.25% - its highest level since 2008 when it reached 8.25%. It has forecasted a peak of 5.5%...

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Office vacancy rates rises in Auckland

29.11.22 Auckland metro office space vacancy continued to trend upwards over the six months to September to reach 8.9% from 8.0% recorded in March, reported Colliers International. Prime grade vacancy stood at 7.1% in September while the secondary grade figure increased to 9.5% from the 8.8% reported in March. The figures showed the city fringe and metropolitan office markets to have remained resilient in the face of changes to workplace practices. The overall vacancy rate sits just 110 bps...

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Kiwi Property rental income record

28.11.22 Kiwi Property has continued to expand both rental income and profitability in the six months ended 30 September 2022, despite the challenging macro-economic conditions. The results highlight the strong performance of the company’s property portfolio and the evolution into a creator of mixed-use communities at key metropolitan centres and transport hubs. Net rental income rose 6.3% to a record-high $100 million in the first half of FY23, driven by sustained revenue growth at Sylvia...

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Property investors staying the course

23.11.22 Property values may be coming down but there are no indications of a wave of selling by property investors according to the latest survey report from Crockers Property Management and economist Tony Alexander. Each month they survey a selection of the many thousands of residential property investors on their databases with a view to gauging how things are changing over time across a wide range of indicators. . Key points of interest from this month’s survey include the following. There...

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Housing values ease in October

3.11.22 The housing market downturn slightly eased in October, with values falling by -1.3% over the month after tracking down -1.5% in September. However any shoots of optimism are likely to be cut short by future increases to the Official Cash Rate (OCR), starting with the next Monetary Policy Statement from the RBNZ on 23 November, says CoreLogic NZ Head of Research Nick Goodall. He said the biggest constraint on the housing market right now is affordability, with potential buyers stretched...

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Valuation drop for Kiwi Property

10.10.22 Draft valuations for the six months ended 30 September 2022 will see Kiwi Property posting an expected 5.8% decrease in the fair value of its property portfolio. The company’s mixed-use, office, retail and other properties are set to be worth $3.4 billion at the close of the period, down $212.5m from 31.3.22. Kiwi Property CEO Clive Mackenzie said: “The current high inflation, high interest rate environment has led to capitalisation rate softening across the property sector globally,...

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Beca signs up for Precinct project

  Precinct Properties New Zealand has confirmed that Beca will be relocating to the Wynyard Quarter Innovation Precinct on a 12-year lease term over 14,049m². The leasing to Beca will require Precinct to commit to 117 Pakenham, the last building of the Stage and the Wynyard Quarter Innovation Precinct. Scott Pritchard, Precinct CEO, said “Securing an occupier like Beca so early in the stage of the development highlights the value that businesses continue to place on high-quality,...

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Consents tilt towards townhouses

30.9.22 The number of dwelling consents fell slightly in August, dropping 1.6% to a level of 4,164. That result was close to Westpac’s forecast for a broadly flat result. Annual consent issuance remains very elevated with just over 50,600 new dwellings consented over the past year. Satish Ranchhod, senior economist at Westpac comments, “Looking into the details of this month’s result, we’re continuing to see a rotation away from standalone houses and towards medium density developments (like...

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House prices drop in August

13.9.22 The rot in the housing market continued in August. House prices fell by another 1.4%, notes Westpac. “That is the ninth monthly fall in a row,” says senior economist Satish Ranchhod. “House prices have now fallen 9% from their peaks in November 2021.” The drop in prices continues to be heavily centred on Wellington in Auckland. Prices in the Capital were down 3.6% in August alone and have now fallen by a total of 17%. Similarly, prices in Auckland have dropped 14% since November 2021....

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Kiwi Property to sell Northlands

7.9.22 As part of its ongoing strategy to focus on the development of mixed-use town centres, Kiwi Property has secured a conditional agreement to sell Northlands Shopping Centre and 43 Langdons Road (Northlands) in Christchurch. The acquirer is MP Holdings 5 Ltd, an entity managed by Mackersy Property (Mackersy), for $160m. The final sale price represents a property level internal rate of return of 10.9% since inception. The purchaser will retain $9m to complete seismic works (noting that...

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Retail vacancy rates stabilising

2.9.22 Despite significant headwinds, there are reasons for optimism within the country’s largest CBD retail markets, according to Colliers International in a new report on the retail property sector. Their research cites a stabilisation in vacancy rates, the return of key support fundamentals, following the reopening of the border, and the adaptability of building owners and retailers. Strip retail vacancy within Auckland’s CBD stood at 13.8% in June 2022 according to the results of the...

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NZ housing downturn deepens -CoreLogic

1.9.22 New Zealand’s housing market downturn has accelerated in the past month with the rate of falls in property values doubling month-on-month in August. CoreLogic’s House Price Index (HPI), which is the most robust measure of property value change in the market, shows the national measure of property values fell a further -1.8% in August, twice the rate of that seen in July (-0.9%). CoreLogic NZ Head of Research, Nick Goodall said restricted, more expensive credit continued to impact...

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Winton Land exceeds forecasts

24.8.22 Winton Land’s inaugural full June year result as an NZX listed company is slightly ahead of its PFI forecasts at $159.5 million in revenue and net profit after tax of $31.7 million. Winton’s gross profit was $72.4m, 2.7% ahead of the company’s PFI and 26.1% ahead of FY21. During FY22, the timing of development and construction programmes resulted in Winton settling 18.8% fewer units than FY21, which saw FY22 revenue 9.9% lower than in FY21, while cost of sales were 27.1% down on FY21....

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House prices in descent

The latest REINZ report revealed a further cooling in the housing market. House sales (July month): 4,822* Monthly % change: -3.1% (Prev month -11.2%) Annual % change: -36.7% (Prev month -36.1% House Price index* Monthly % change: -1.7% (Prev month -1.0%) Annual % change: -2.9% (Prev month +0.7%) The REINZ house price index fell another 1.7% over the month and prices are now down 3% compared to the same month last year. “We have not seen year-on-year house price falls since 2011, when the...

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CDL notes change in trading climate

10.8.22 NZX-listed property development and investment company CDL Investments New Zealand (NZX:CDI) reported an operating profit after tax of $22.90 million (2021: $20.75 million) in the June six months. This is on revenue of $47.81 million (2021: $61.27 million). “The last six months have seen a dramatic change in the trading environment”, said CDI’s chair Colin Sim. “The irony is that those changes have been caused by external factors totally outside of our control and have nothing to do...

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Building activity rising

    The volume of building activity in New Zealand rose 3.2% in the March 2022 quarter, compared with the December 2021 quarter, according to Stats NZ. Residential building activity rose 3.5% in the March 2022 quarter, while non-residential building activity rose 2.7% "Residential building activity has risen over the past two years, except in quarters impacted by alert level 4 lockdowns. “This reflects the large number of consented new homes in the construction pipeline,"...

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SBS Bank has solid year

SBS Bank has delivered another strong result for the 2021-2022 financial year, finding innovative ways to support members through the challenges of the Covid-19 pandemic. The SBS Group, which includes subsidiaries Finance Now, FANZ and SBS Insurance (Southsure), reported an operating surplus of $61.3 million for the year ending March 2022, up from $55.2 million the previous year. The bank’s lending rose $365 million to $4.4 billion during the period and SBS Bank members’ equity increased $74...

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Investore has strong year in large format

Large format retail has boosted Investore's valuation 18.5.22 The market for large format retail properties has remained strong during the last year and this has benefited Investore in the year FY22. Evidencing this demand, Investore’s portfolio is independently valued at $1.2 billion as at 31.3.22, a net valuation increase of $91.0 million or 8.2% over the 12 months from 31.3.,21. This increase has been driven primarily by capitalisation rate compression which evidences the continued...

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‘Debt vs Equity split opens up

Corelogic has highlighted a ‘debt vs equity’ split in the property market, with mortgaged investors and first home buyers seeing low/falling shares of property purchases, but cash investors and movers having a rising presence. In a Market Pulse column CoreLogic’s Chief Property Economist, Kelvin Davidson, says, “To be fair, these changes in market share need to be viewed in the context of lower overall numbers of transactions. “But with loan to value ratio rules still pretty tight and mortgage...

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Fabric property portfolio switch

5.4.22 Stride Property has confirmed that the acquisition by SPL’s wholly-owned subsidiary, Fabric Property Ltd of the Prime-grade property at 110 Carlton Gore Road, Newmarket, Auckland, from Mansons CGR Ltd is now unconditional, with all conditions having been satisfied or waived. The purchase price is $213 million, being $4.5m below the originally contracted purchase price. In addition, Fabric has entered into an agreement to sell four B-grade office properties to Mansons CGR Limited, being...

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A decade delay on that deposit

27.2.22 It now takes 11.7 years to save a deposit – that’s a key message in a new report from CoreLogic,   Surging house prices, rising mortgage rates and low wages growth has led to further deterioration in housing affordability, according to CoreLogic’s bi-annual Housing Affordability Report. All but one of CoreLogic’s four measures of affordability nationally have deteriorated to their worst levels on record. CoreLogic Chief Property Economist, Kelvin Davidson, says, “We know that...

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Precinct links up with Singapore fund

23.2.22 Precinct Properties has today revealed it has conditionally established a new strategic investment partnership with Singapore sovereign wealth fund GIC. The partnership will initially acquire five assets from Precinct’s existing portfolio totalling around $590m, comprising three Wellington and two Auckland assets, with the ability to grow to around $1.0 billion. Precinct will own a minority 24.9% interest in the partnership. The establishment of the real estate investment partnership...

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Industre lifts portfolio value

13.2..22 Stride Property Group updated on the Industre Property Joint Venture portfolio, noting that the total portfolio value has now grown to $787.7m as at 31 .12.21. It would stand at $864.3m including completed and committed acquisitions and developments. The Industre portfolio was valued at $737.7m as at 30.9.21, or $792.4m including committed acquisitions and developments as at that date. Industre has achieved $72m of further growth in its portfolio on a committed basis, including $37m...

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Increasing investment demand

5.2.22 Heightened investment activity looks set to propel the total annual value of commercial and industrial property sales in New Zealand past $12 billion for the first time, says Colliers New Zealand. “This reflects the impact on value and the significant yield compression that has occurred over the past few years,” says Chris Dibble, national director partnerships and research at Colliers. The final tallies will be confirmed over the next few months due to lags in official reporting, but...

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Rising investment demand

4.3.22 Heightened investment activity looks set to propel the total annual value of commercial and industrial property sales in New Zealand past $12 billion for the first time, says Colliers New Zealand. “This reflects the impact on value and the significant yield compression that has occurred over the past few years,” says Chris Dibble, national director partnerships and research at Colliers. The final tallies will be confirmed over the next few months due to lags in official reporting, but...

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Record price surge for houses

25.1.22 In December, the national average asking price jumped by a quarter year on year, to reach a new high of $956,150, according to the latest Trade Me Property Price Index. Trade Me Property Sales Director Gavin Lloyd said last month’s national average asking price increase was the largest on record. “After entering the $900,000 bracket for the first time in November, the national average asking price continued to break records and show unprecedented growth last month. “ December marked...

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Deceleration in housing market

The Auckland market softened in December 18.1.22 The REINZ report for December provided more convincing evidence that higher mortgage rates and tighter lending restrictions are having an impact on the housing market, says Michael Gordon, acting chief economist at Westpac. “The house price index fell by 0.5% in seasonally adjusted terms, the first monthly drop since the Covid lockdown last year. “Sales continued to fall, and are now starting to drop below pre-Covid levels. The softening in the...

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Two Christmas deals for Goodman

23.1.2.21 Goodman (NZ) has inked two notable transactions with which to celebrate the end of the 2021 year. Goodman is to develop a new 17,992m² parcel processing centre for NZ Post on Bush Road in Albany This follows another design-build project underway for the customer at the Trust’s Roma Road estate in Mt Roskill. Goodman CEO John Dakin said, “NZ Post has committed to a 20-year lease over the new facility. Like the Roma Road project, it will be a highly sustainable, carbon neutral, Green...

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