Central Otago’s growth is helping fuel a return to optimism for Dunedin’s commercial property sector, particularly in office and industrial property, as well as student investment property.
Campus sales (blue area on map) stood out as a key and growing sector for the first half of 2015, with investment buyers continuing to favour the Campus location. Those properties for sale received strong interest and yields.
Campus sales (blue area on map) stood out as a key and growing sector for the first half of 2015, with investment buyers continuing to favour the Campus location. The volume of first quarter transactions trumped any quarter from 2014, and in a period where usually low volumes of sales are experienced.
This bodes well for a healthy year to come, as numbers of transactions often peak in the second half of the year. Those properties sold received strong interest and while yields in the first quarter rose on average, the following months have been very strong, pulling the median yield back to familiar levels at around 7.0% gross.
Source: Q2 2015 – Uni Sales Report (Matt Morton)
The Dunedin commercial property market continues to show high demand for prime property in all three sectors of the market, industrial, office and retail. Rental growth continues for modern industrial properties, fuelled by a number of new build facilities achieving high levels of rent. In the office sector, investors remain attracted to high quality office properties, and some of the tenant demand has been met by the addition of refurbished premises into the marketplace, although a shortage of quality available office accommodation remains an opportunity for owners and developers.