2012 Global Market report - NAI Global

Christchurch, New Zealand
Wellington, New Zealand
Contact
NAI Harcourts Holmwood
Real Estate
+ 64 3 378 0020
NAI Harcourts Grenadier
Real Estate
+ 64 3 371 9126
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
104,428
3.2%
$147.75
$33,456.13
5.5%
5.8%
2.5%
4.416
Christchurch’s rebuild including commercial, residential and
infrastructure expenditure has been estimated at $30 billion
in the latest revision. The Canterbury Development Corporation
anticipates 30,000 trades people will be required over 10 to
15 years for the rebuild. The new draft city plan has some
great ideas which potentially could make Christchurch one
of the top cities in the world.
The draft city plan was released for comment on August 16,
2011 and has received many positive responses from the
public and larger institutions. Provided some restrictions
which create barriers to encouraging businesses back to the
CBD are removed, we believe property owners will get behind
the plan and rebuild with confidence. Insurance has been an
issue for both existing and new developments, but an easing
attitude from the insurers is anticipated in the coming weeks,
allowing more projects to get underway including the new
NAI Harcourts offices at 271 Madras Street.
The property market continues to show substantial interest
from land buyers within and outside the CBD, while vendors
who are likely to sell, remains low. Banks are also lining up
to support the rebuild provided the insurance handle is
decreased. In line with Westpac’s September confidence
survey we see regional economic confidence increasing with
the two growth drivers being construction and agricultural
export incomes. These results bode well for Christchurch and
Canterbury, providing more certainty of sustained economic
growth for at least the next 10 years. This view is shared by
many off shore based investors who, in the face of continued
volatility in world share and financial markets, are happy to
invest in Christchurch land and rebuild.
Contact
NAI Harcourts Team
Wellington
+64 4 801 5199
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
104,428
3.2%
$147.75
$33,456.13
5.5%
5.8%
2.5%
4.416
The Wellington Region seems to be emerging quicker from
the recessional times than first thought. With the result of
an impending election upon us, any government elected
will no doubt attempt to soften the effects of mounting global
uncertainty through monetary and fiscal measures. Despite
these measures it is unlikely to have much of a positive affect
on the sluggish property markets.
Wellington’s vacancy rates are expected to rise to 14% by
2012 due to the completion of some 48,000 SM of Class A
office space. Proposed office developments such as Harbour
Quays and Wellington Waterfront will however place pressure
on the secondary office landlords to refurbish and improve
their stock to minimize movement of their existing tenants,
which will no doubt be drawn to higher quality vacancies.
In retail, sentiment is down and established stores are reluctant
to move, even just round the corner, in case they lose their
already fragile customer base. Some key segments such as
supermarkets and international brands are still performing
well, as shopping locally is cheaper than a spree in Australia.
Occupation is still strong within the regional shopping malls
such as Westfield and the ‘Golden Mile’ of Lambton Quay.
Whereas secondary markets in towns surrounding Wellington
are in trouble as a number of prime sites sit vacant. These
present great leasing options for enterprising retailers who
could be well advised to take advantage of this nervousness
as landlords forego rental increases to attract interest.
Industrial vacancy rates have been falling as the confidence
in this sector steadily increases; vacancy rates in the Hutt
Valley which accommodates the majority of industrial space
is hovering around 8%. Industrial landlords are proactively
reacting to the changing market conditions by offering
generous inducements to secure tenants in long term leases.
This aggressive approach to letting, coupled with expanding
New Zealand manufacturing output over the past six months
(according to a BNZ survey) has resulted in industrial property
across the Wellington region being the best performing sector
when compared to returns from retail and commercial office
property.
Business and non-business lending, although at a low rate
historically, could be on the incline and with lower levels of
debt recorded than previous years, a leveling is expected
in anticipation of a growing confidence in the positive
performance of the commercial property sector.
Christchurch At A Glance
conversion 1.26 nZd = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR
low High low High Vacancy
cItY center offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
NZD
NZD
NZD
NZD
N/A
350.00
200.00
N/A
220.00
150.00
N/A
NZD 450.00
NZD 350.00
N/A
NZD 270.00
NZD 220.00
$
$
$
$
N/A
25.81
14.75
N/A
16.22
11.06
N/A
$ 33.18
$ 25.81
N/A
$ 19.91
$ 16.22
0.10%
0.10%
0.10%
0.10%
0.10%
0.10%
Bulk Warehouse
Manufacturing
NZD
NZD
70.00
70.00
NZD 120.00
NZD 120.00
$
$
5.16
5.16
$
$
8.85
8.85
3.00%
3.00%
High Tech/R&D
retaIl
Downtown
Neighborhood Service Centers
Community Power Center
Regional Malls
Solus Food Stores
NZD
NZD
NZD
NZD
90.00
300.00
250.00
N/A
600.00
N/A
NZD 140.00
NZD 700.00
NZD 350.00
N/A
NZD 1,000.00
N/A
$
$
$
$
6.64
22.12
18.43
N/A
44.24
N/A
$ 10.32
$ 51.61
$ 25.81
N/A
$ 73.73
N/A
3.00%
0.10%
0.10%
0.10%
0.10%
0.10%
deVeloPment land low/m 2 High/m 2 low/acre High/acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
NZD 1,500.00 NZD 2,500.00 $ 4,817,693.65 $ 8,029,489.42
NZD 1,500.00 NZD 2,500.00 $ 4,817,693.65 $ 8,029,489.42
NZD 300.00 NZD 400.00 $ 963,538.73 $ 1,284,718.31
NZD 300.00 NZD 400.00 $ 963,538.73 $ 1,284,718.31
NZD 400.00 NZD 600.00 $ 1,284,718.31 $ 1,927,077.46
NZD 300.00 NZD 1,100.00 $ 963,538.73 $ 3,532,975.35
Wellington At A Glance
conversion 1.26 nZd = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR
low High low High Vacancy
cItY center offIce
New Construction (AAA)
NZD 1,500.00 NZD 3,000.00 $ 110.60 $ 221.20 N/A
Class A (Prime)
Class B (Secondary)
suburban offIce
NZD
NZD
320.00
180.00
NZD
NZD
500.00 $
280.00 $
23.59
13.27
$
$
36.87
20.64
N/A
N/A
New Construction (AAA)
NZD 1,200.00 NZD 3,000.00 $ 88.48 $ 221.20 N/A
Class A (Prime)
Class B (Secondary)
IndustrIal
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
NZD
NZD
NZD
NZD
NZD
200.00
150.00
50.00
60.00
100.00
NZD
NZD
NZD
NZD
NZD
250.00 $
200.00 $
75.00 $
85.00 $
150.00 $
14.75
11.06
3.69
4.42
7.37
$
$
$
$
$
18.43
14.75
5.53
6.27
11.06
N/A
N/A
N/A
N/A
N/A
Downtown
NZD 1,000.00 NZD 2,500.00 $ 73.73 $ 184.33 N/A
Neighborhood Service Centers
Community Power Center
Regional Malls
Solus Food Stores
NZD 250.00
N/A
N/A
N/A
NZD 480.00 $
N/A
N/A
N/A
18.43
N/A
N/A
N/A
$ 35.39
N/A
N/A
N/A
N/A
N/A
N/A
N/A
deVeloPment land low/m 2 High/m 2 low/acre High/acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
N/A N/A N/A N/A
N/A N/A N/A N/A
NZD 200.00 NZD 400.00 $ 642,359.15 $ 1,284,718.31
NZD 250.00 NZD 500.00 $ 802,948.94 $ 1,605,897.88
NZD 750.00 NZD 1,000.00 $2,408,846.83 $ 3,211,795.77
NZD 300.00 NZD 1,600.00 $ 963,538.73 $ 5,138,873.23
2012 Global Market Report n www.naiglobal.com 40