Colliers International has just released their May commercial property Research Report of New Zealand.
The PCNZ/IPD investment index for the year to March 2009 has been released. The numbers reveal that, for the first time since the composite index was published in 1993, total return was negative, as steady income returns were overwhelmed by declining capital values. New Zealand now joins a not so exclusive club of countries where returns are going underground. While twelve quarters have passed since the US market peaked, and eleven in the UK, it is only seven short quarters since annual returns (for the previous year) peaked in New Zealand. Notably, although Australia and New Zealand have been slow starters, returns have fallen much more quickly here than in the US, Canada and Japan, and in Australia’s case, even more quickly than the UK. IPD figures show the UK has fallen more below zero as it once was above zero (in their case about 18.7% to -22.1%), but we don’t expect New Zealand’s performance to be nearly as bad. We are protected by our relatively sound market fundamentals and banking system.
Looking in more detail at the returns, retail was the lowest of the major categories at minus 3.7%. Auckland CBD Office at minus 0.5% and Wellington CBD Office at plus 0.2% just broken even. Auckland Industrial performance at plus 0.6% versus negative 0.8% for the market was marginally better but we don’t expect to see wild celebrations in Penrose on receipt of this news.
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Sales,
Office Leasing,
Retail,
Industrial,
Valuation and Advisory Services,
Corporate Solutions,
Research & Consultancy,
Auckland Office,
North Shore Office,
South Auckland Office,
Wellington Office,
Christchurch Brokerage,
Dhilan Balia,
Alan McMahon