Colliers Portfolio | Issue 2 2023

Licensed REAA 2008

Colliers Portfolio Issue 2

50 Burns Street, Dunedin Otago More on page 9

Accelerating success.

Apr/May

2023

Recent Deals SOLD

SOLD

SOLD

2 Colliers Portfolio

13-15 Pukemiro Street, Onehunga Sold by Ben Cockram and James Dickey

SOLD

241 Annex Road, Middleton, Christchurch Sold by Sam Staite

SOLD

29 I'Anson Road, Te Puna, Bay of Plenty Sold by Jeff Barbour and Brad Barbour

7 Henry Street, Queenstown Sold by Barry Robertson and Steve McIsaac

SOLD

5/134 Grace Road, Tūrangi, Taupō, Waikato Sold by Hugh Milloy

SOLD

2/25 Sir William Avenue, East Tāmaki, Auckland Sold by Greg Watson and Greg Goldfinch

11 Henry Street, Queenstown Sold by Rory O'Donnell and Mark Simpson

SOLD

186 Parkinson Road, Waiotahe, Ōpōtiki, Bay of Plenty Sold by Conrad Headland

SOLD

GL08, 359 Cameron Road, Tauranga Sold by Richard Davidson and Rachel Emerson

Commentary Welcome to the second edition of Colliers Portfolio for 2023.

With Q1 behind us, vendors and purchasers are starting to get closer in their expectations regarding land and property values as the macroeconomic forces that have affected our industry during the past 12 months begin to flatten.

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With Gareth Fraser moving into his new role as CEO of Colliers New Zealand from 1 May, I have the great privilege of taking over as Auckland Director of Investment Sales and I am incredibly excited about the opportunity.

Some strong recent results are giving confidence to the market and providing a reason to be optimistic that we have seen the worst of the market uncertainty.

Positive activity throughout our regions through sales and upcoming listings suggests that the sentiment is the same throughout the country.

Our latest edition of Portfolio features an outstanding selection of properties from a variety of asset classes, including a large-scale landholding set for residential development in Pukekohe, a highly functional warehouse and office building with vacant possession in Mount Wellington in Auckland, and a collection of premium listings in Tauranga.

Thank you for your continued interest in Colliers Portfolio, our national sales team has an outstanding range of investment opportunities available and looks forward to hearing from you.

David Burley

Auckland Director | Investment Sales

Colliers Portfolio

Owner-occupiers continue to be a strong part of our market as they take advantage of favourable capital circumstances.

Contents Colliers Portfolio Issue 2 05 High profile split risk investment opportunity

Did you know?

06

Colliers Portfolio is online.

08

Prime investment opportunities in Mount Maunganui and Tauranga

Take Colliers Portfolio on the go with you, by clicking the link below:

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portfolio.colliers.com

Large-scale site in Hawke's Bay 4 Colliers Portfolio

Key Listings

15

Auckland CBD office research report H1

16 New Zealand research report April 2023

18

Wellington CBD office research report H1

19

Colliers acquires project management business

5 Colliers Portfolio

For Sale High Profile Split Risk Investment Opportunity 139 Cascades Road, Pakuranga Heights, Auckland For Sale by Deadline closing Wednesday 7th June 2023 at 4:00PM (unless sold prior)

4,062sqm corner site

Income stream of $337,951

Established service industry tenants

WALT of 3.2 years

Business - Light Industry Zone

Colliers New Zealand has been exclusively appointed to market 139 Cascades Road, Pakuranga for sale via Deadline Private Treaty, offers to be submitted by 4:00pm, Wednesday 7th June 2023 (unless sold prior).

139 Cascades Road offers a 1,534sqm site, zoned Business - Light Industry, located close to a commercial precinct as well as a large residential catchment.

This is a prime opportunity to acquire a site that offers numerous enticing investment options.

David Burley 021 478 225 colliers.co.nz/p-NZL 67023527

Matt Barnes 021 828 563

6 Colliers Portfolio

9.4 ha Strategic Landholding 5.01 ha Industrial & 4.47 ha Plains Production 1170 Maraekakaho Road, Hastings, Hawke's Bay For Sale by Tender closing Wed 24 May 2023 at 4pm (unless sold prior)

Land Area: 9.4900 ha

Mixed Zoning

Consented Truck Wash

Close to Expressway

Great Access

Subdivision Opportunity

Spanning across approximately 5.01 ha of industrial land and 4.47 ha of plains production rural land, all under a single title, this site is one of the last remaining large, undeveloped parcels within the highly sought-after Irongate industrial area.

The location boasts an array of blue-chip neighbours, including Balance, Waipak, Tumu's, Hilton Haulage, and Rockit, further enhancing the site's appeal and potential.

This development opportunity allows for immediate commencement of construction, as it already boasts access, services, and title. Furthermore, the land parcel comes complete with a consented truck wash and an impressive 5,500m² of hard-packed shingle yard space.

Danny Blair 021 826 496

Jack Hughes 021 242 4742

colliers.co.nz/p-NZL67023411

News

1170 Maraekakaho Road, Longlands in Hastings measures 9.49ha and comprises approximately 5.01ha of Industrial zoned land and 4.47ha of land that is zoned Plains Production.

The total holding is under a single freehold title and is one of the last remaining large, undeveloped parcels within the highly sought-after Irongate industrial area.

The property is perfectly suited for a noteworthy development that could enhance the surrounding area and has favourable proximity to the Hawke’s Bay Expressway, providing access to various other parts of the region.

It allows for immediate commencement of construction as it already boasts access, services, and a title, which sets it apart from other large greenfield sites.

One key drawcard is the site comes with a consented truck wash, which can be hard to obtain, and a highly functional 5,500sq m of hard-packed shingle yard space that will prove incredibly useful for future occupants.

The location boasts an array of blue-chip neighbours, including Balance, Waipak, Tumu's, Hilton Haulage, and Rockit, further enhancing the site's appeal and potential.

“The contour and shape of the site means it is perfectly positioned to be transformed into a sizeable transport, logistics, or industrial offering.

“The Industrial zoning is incredibly helpful for prospective purchasers as it offers tremendous flexibility for any future usage.

“The property also has the potential to be positioned as a cool store facility, which would be sought-after in the local area given the prevalence of horticulture in Hawke’s Bay, one of the bedrocks of the local economy.”

Blair, Director at Colliers Hawke’s Bay, says the access to the property from Maraekakaho Road is convenient.

“While there is no profile to the main road from the property, it means it is away from the hustle and bustle and offers privacy for the occupants,” Blair says.

“With the motorway network nearby, the Hastings CBD is only 4.2km away, while the Hawke’s Bay Airport can be reached in approximately 20 minutes.”

Blair says buyers with a long-term view of the property could unlock further value in the future.

“There is potential that surrounding land could be rezoned down the line, which will allow the industrial hub of Irongate to flourish even further.“

Colliers Hawke’s Bay Brokers Jack Hughes and Danny Blair have been exclusively appointed to market the property for sale by tender, closing at 4pm on Wednesday 24 May, unless sold prior.

“Properties of this nature that offer such flexibility and scale remain highly desirable for buyers given the growth potential on offer. The fact that any future development could begin immediately as the services are in place is another important selling point.

Hughes, Sales and Leasing Broker at Colliers Hawke’s Bay, says the sheer size of the landholding means it is well placed for a large-scale development.

“We encourage all interested parties to contact us immediately so they can discuss their options with this unique offering.”

“It is rare to see sites of this size brought to the market, but it will be highly appealing for buyers who will recognise the potential on offer,” Hughes says.

To continue reading and find out more, scan the QR Code

Colliers Portfolio

A significant landholding in Hastings that has considerable development potential offers developers, investors, or owner-occupiers the opportunity to acquire a large-scale site for their next major project.

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Large-scale site in Hawke’s Bay

Strategic Mount Land with Freezer/Coolstore Industrial Investment Opportunity 8 Titoki Place, Mount Maunganui

For Sale/For Lease closing Thu 25 May 2023 at 4pm (unless sold prior) 8 Colliers Portfolio

6,193m² freehold site

Coolstore/ freezer vacant

Rob Schoeser 021 490 425

Development opportunity

Central Mount location

Ideal logistics location

Market rent $300K - $330K

Simon Clark 021 959 710

colliers.co.nz/p-NZL67021727

Welcome Bay Tavern Freehold - Lease Expiring 2026 Tavern & Liquor Freehold Opportunity 250 Welcome Bay Road, Welcome Bay, Tauranga

For Sale by Deadline Private Treaty closing Thu 1 June 2023 at 4pm (unless sold prior)

Land area: 5,144m²

Simon Clark 021 959 710

Building area: 824m²

Lease expires April 2026

Rental: $202,000 pa

Duncan Woodhouse 021 888 962

colliers.co.nz/p-NZL67023509

Bar, pokies & liquor

Zoned commercial

BOUNDARY LINES INDICATIVE ONLY

Pole Position on Barrys Point Road First time on the market in 20 years!

87 Barrys Point Road, Takapuna, Auckland

High Profile 1,181m² Freehold Title

750.8m² Net lettable area

Matt Prentice 021 464 904

Zoned Business Mixed Use Zone

Available with Vacant Possession

Tom Peterson 021 186 4489

Unobstructed Harbour & city views

Developers, occupiers & investors must see

Shoneet Chand 021 400 765

colliers.co.nz/p-nzl67023186

A-Grade Bottom Drawer Investment New 10-year Lease to Fletcher Distribution 50 Burns Street, Dunedin

For Sale by Deadline Private Treaty closing Wed 7 June 2023 at 4pm (unless sold prior)

Completed build in 2022

$644,487.45pa + GST rental

New 10 year lease

Dean Collins 027 499 0974 colliers.co.nz/p-NZL67023477

Fixed annual growth

Land approx 11,761sqm

100% NBS

Colliers Portfolio

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For Sale by Deadline Private Treaty closing Tue 9 May 2023 at 4pm (unless sold prior)

10 Colliers Portfolio

Large-scale site in Hawke’s Bay This exceptional development opportunity at 1170 Maraekakaho Road is ideally suited for discerning companies and property developers.

Details on page 6

Colliers Portfolio

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For Sale Newmarket Office-Warehouse with Endless Possibilities 12

13-15 Margot Street, Newmarket For Sale by Deadline Private Treaty closing Wednesday 31st May 2023 at 4:00 pm (unless sold prior)

Colliers Portfolio

High spec warehouse

Unbeatable location

1,000m² of Net lettable area

colliers.co.nz/p-NZL67023506

19 car parks

Attractive holding

1,356m² landholding

David Burley 021 478 225

Kris Ongley 021 657 687

Large Scale Suburban Development Site

Affordable Corner Site

9 Hulme Place, Henderson

22 Clyde Road, Ōtara

For Sale by Expressions of Interest Closing Thursday 18th May 2023 4pm (unless sold prior)

14,396m² Freehold Site

Business Mixed Use

Committed Vendor

Josh Coburn 021 990 691 Craig Smith 021 490 580

colliers.co.nz/p-nzl67023217

For sale by Deadline Private Treaty closing on Wednesday, 25 May 2023 at 4pm (unless sold prior)

Z 328m² freehold title Dhiru Patel 021 340 780

Road frontage

Neighbourhood Centre Zone

Ryan Gibb 021 826 421

colliers.co.nz/p-nzl67023383

Calling all Owner-Occupiers

83A Boundary Road, Papakura

54 Grayson Avenue, Papatoetoe

For Sale by Deadline Private Treaty closing Wednesday 10 May 2023 at 4pm (unless sold prior)

Auction to be held Wednesday 31st May 2023 at 11:00 pm (unless sold prior)

5 years left on lease

Freehold land area of 1,012m²

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Standalone Investment

1,700m² highspec building

546m² of building area

Invest/Occupy

Josh Franklin 021 990 714

Logan Roach 027 358 9383

Hamish West 021 882 737

Tosh Sharma 021 054 3649

colliers.co.nz/p-NZL67023198

colliers.co.nz/p-NZL67023429

Boundary lines are indicative only

Boundary lines are indicative only

Massive Development Potential

Mt Wellington Industrial HQ

70, 70A & 70B Lisle Farm Drive, Pukekohe

8 Hotunui Drive, Mt Wellington

For Sale by Deadline Private Treaty closing Wednesday 17 May 2023 at 4pm (unless sold prior)

For Sale or Lease by Deadline Private Treaty closing Wednesday 17 May 2023 at 4pm (unless sold prior)

19.1848 Ha freehold site - 3 titles

Prime development land

2,180m² net lettable area

Ash Vincent 021 442 201

Tony Marsh 021 141 2072

Future Urban & Residential zoning Josh Franklin 021 990 714

colliers.co.nz/p-NZL67023293

Ben Cockram 021 245 5855

4,455m² land area

Secure yard and plenty of parking

Todd Kuzmich 021 410 774

colliers.co.nz/p-NZL67023311

Colliers Portfolio

4,012m² freehold site

The Warehouse - New 10 Year Lease Retail Investment Opportunity The Warehouse, Fraser Cove Shopping Centre, 241 Fraser Street, Tauranga For Sale by Deadline Private Treaty closing Thu 25 May 2023 at 4pm (unless sold prior) 14 Colliers Portfolio

Floor area: 9,996.68m²

New 10 year lease

Rachel Emerson 021 502 877

Net rent (est) $2,021,000

Strong tenant covenant

Two yearly rent growth

Huge amount carparks

Simon Clark 021 959 710

colliers.co.nz/p-NZL67023508

Featured Brokers

Simon Clark

Rachel Emerson

Managing Director Tauranga

Industrial & Retail Broker Tauranga

M: 021 959 710 simon.clark@colliers.com

M: 021 502 877 rachel.emerson@colliers.com

Simon is the Managing Director of the Colliers Tauranga office. With over 28 years in the industry, he is the most experienced and successful commercial broker in the region. He specialises in the sale of commercial and industrial investments as well as the lease of industrial properties.

Rachel joined Colliers in 2017 with 25 years (and counting) of property industry experience in Auckland, Wellington and Tauranga. Rachel offers her clients a strong background in all facets of real estate having worked in a wide spectrum of property roles for retailers, landlords and developers.

Research

Auckland’s CBD office market vacancy continued to trend up over the latter half of 2022. The overall vacancy rate reached a new cyclical high of 12.9%. The latest figures illustrate the growing divergence in demand between prime and secondary grade premises. Prime grade vacancy, despite additions to supply, held steady at 8.3% in Colliers’ December, survey compared with 8.2% in June.

Secondary grade vacancy at 17.1% in December is up from 16.4% six months earlier. The growing influence of environmental considerations in shaping office demand is also evident in the results. The vacancy rate within Green Star rated premises is at 5.5%, compared to non-Green Star rated premises at 16.2%.

a sharp downturn in investment activity, with the focus currently shifting towards add-value and development projects due to the uncertainty surrounding when and at what level interest rates will peak.

Between December 2020 and December 2022, the total supply of CBD office space decreased by around 29,000 sqm. However, the supply of prime quality space increased by almost 28,500 sqm, while secondary supply fell by almost 57,500 sqm. Currently, there are projects underway that will introduce approximately 84,200 sqm of new space to the CBD's inventory over the next three years. Although development activity may slow from recent levels, the demand for high-quality, environmentally sustainable buildings will continue to drive development intentions. Therefore, further project announcements can be expected.

During the second half of 2022, prime grade rentals continued to trend upwards due to inflationary pressures and an active leasing market. Average net face prime rentals now stand at around $513 per sqm, but a wide range in rates is being achieved. In addition, new build office rents are being elevated by rising construction costs.

Rising debt costs and margins, resulting from local and offshore reserve banks tackling inflation, have led to a softening of yields. While evidence remains limited for all building grades and locations, incremental adjustments are being made. Currently, average prime office yields sit at around 5.8%, with further softening anticipated over the course of 2023. The softening of yields has also resulted in an easing of capital values. As a result, there has been

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Colliers Portfolio

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Auckland CBD Office | Report First Half 2023

Research

New Zealand Market | Research Report April 2023

16 Colliers Portfolio

Industrial property’s appeal continues Ongoing tenant demand for industrial property has kept vacancy rates at historically low levels, despite higher interest rates, a cooling economy, and increased development activity. Although, sales activity volumes for industrial premises have slowed due to challenging economic and tougher financial conditions, industrial property’s strong fundamentals continue to underpin the sector’s safe-haven credentials which have seen the sector’s share of total commercial and industrial sales increasing.

Strong demand holds vacancy at historic lows Auckland's industrial vacancy rate was recorded at 1.9% by Colliers Research in its latest February 2023 survey, virtually unchanged from the August 2022 figure of 1.8%. Vacancy across the region's major industrial precincts have been below 2.5% since February 2015. Conditions are tighter at the prime end of the market, with vacancy measured at a new record low of just 0.5%.

When viewing the results by area, vacancy declined in the region's three largest industrial precincts over the six months to February. In East Tamaki, which has a total inventory of nearly 2,500,000 sqm, vacancy declined from 1.5% to 1.3%. Across the Onehunga/Penrose precinct, vacancy dropped from 2.7% in August to 2.0% in February.

Vacancy increased in Mount Wellington the fourth largest of the region’s precincts. Overall vacancy rose to 0.9% from 0.3% six months earlier. The increase has, however, been driven entirely by the secondary sector in which vacancy has reached 2.3%. By contrast, as at the date of survey, there were no prime grade leasing options. The extended period of tight market conditions and limited development opportunities within most established precincts has resulted in the emergence of new industrial zones on the periphery of the city. These zones are also witnessing strong demand and low vacancy rates. In Westgate, over 16,000 sqm of workspace was added to the area's inventory between August 2022 and February 2023, yet vacancy remained virtually unchanged at 0.6% in February.

In Silverdale, vacancy declined to 2.5% from 3.3%, despite development adding 19,500 sqm of stock.

Development slows as constraints remain in play Construction activity recovered quickly following a sharp decline resulting from the onset of the COVID-19 pandemic.

High levels of demand and accommodative economic conditions bolstered confidence within the development sector. Building consent issuance for the year ending November 2022 reached 540,187 sqm, almost at the record level of 569,682 sqm recorded for the 12-month period ending in July 2019.

has been milder the total new floor area approved has slipped from a peak of 254,200 sqm as of October 2022 to 244,171 sqm in February.

The slowing of momentum reflects a combination of constraints impacting the development sector. A shortage of skilled workers and supply chain disruption has contributed to rapidly rising construction costs, which, accordingto StatsNZ's capital goods price index, saw costs for industrial premises increase by a further 10.1% over 2022. A shortage of appropriately zoned land for industrial expansion is another major constraint. Land shortages, particularly within established precincts, have kept prices elevated, with the average cost of industrial land across

While the results of vacancy surveys and upward pressure on rentals, which reached record levels in 2022, reflect the need for significant additions to stock, particularly at the prime end of the market, challenges faced by the development sector have intensified, leading to a slowdown in activity. The latest consents data released by StatsNZ shows the total floor area approved over the year to January 2023 to be 393,453 sqm, the first time the rolling total has fallen below 400,000 sqm since November 2021.

Once again, the trends evident in Auckland have parallels elsewhere in the country. In Wellington, the area approved for new construction in the year to February 2023 was 40,103 sqm, having peaked at 56,490 sqm in the 12 months ending September 2009. In Christchurch, whilst the decline

Although the construction sector will face challenges in the remainder of 2023, the industry will welcome the easing of some of the industry’s major constraints. Building costs have shown evidence of passing their peak, due to a reduction in supply chain issues and a slowing of trade rate increases. Moreover, the government has taken steps to ease skills shortages by creating new pathways for overseas workers to obtain work visas, such as reopening the skilled migrant category residence visa, which had been suspended during New Zealand's border closure, and implementing the Accredited Employer Work Visa system.

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Colliers Portfolio

Easing of some impediments will be welcome

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Auckland of $1,185 per sqm at the end of 2022, well above the approximately $805 per sqm recorded in December 2020.

Research

Wellington CBD Office | Report First Half 2023 18 Colliers Portfolio

The capital’s office market has continued to perform strongly despite the prospects of an economic slowdown and the sharp downturn in business confidence. Demand has continued to run ahead of new supply underpinned by the government sector and bolstered by corporate occupiers seeking higher quality space. As a result, overall vacancy has fallen to the lowest level recorded since 2008 reaching 5.4% as of December 2022, down from the 5.9% recorded six months earlier.

Office supply will receive a significant boost in 2023 with the completion of several significant projects. In total, approximately 55,000 sqm of new build and refurbished space will be added to the CBD’s inventory over the year.

While development activity is set to slow after 2023, ongoing demand for prime quality space continues to underpin development intentions. This is well illustrated by confirmation from Precinct Properties that it is to develop a new 24,000 sqm office property at 61 Molesworth Street with tenant pre-commitment from the Ministry of Foreign Affairs and Trade (MFAT).

Tight market conditions, the introduction of new highquality premises, and an inflationary environment has placed upward pressure on rentals. Average prime grade gross face rents currently stand at $680 per sqm, up from $643 a year earlier. With prime grade leasing options having been limited for an extended period, rents for B grade space have also been increasing, up by 4.2% over the year to December 2022.

The impact of higher interest rates and the prospect of economic recession has seen investment activity slowing.

Demand from both local and overseas investors for prime quality assets, however, remains keen. With the latter well illustrated by the sale of assets by Precinct Properties to GIC and PAG, via joint venture investment funds.

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Colliers welcomes Greenstone Group

For the full article, scan the QR code

Colliers has acquired a controlling interest in the Greenstone Group, a leading project management and property advisory firm in New Zealand.

The Greenstone Group’s senior leadership team will remain significant shareholders of the business under Colliers’ unique partnership model. The business will rebrand as ’Colliers Project Leaders‘ and integrate into Colliers’ market-leading New Zealand operations. Terms of the transaction were not disclosed.

Founded in 2000, Greenstone Group offers project management and property advisory services to a diverse range of end-markets, including the commercial, industrial, retail, residential, education, and infrastructure sectors. Greenstone Group’s professional services are delivered by more than 55 professionals across four offices in New Zealand.

Mark Synnott, CEO Colliers New Zealand, says this acquisition will bolster Colliers’ existing Project Leaders service offering and complement their award-winning Strategic Advisory team.

“This represents an exciting new phase for Colliers in New Zealand as we build our capacity in the Project Leaders service line, which is led by Director Kerry Woods, and add more highly skilled experts to our team,” Synnott says.

“We are proud to partner with the Greenstone Group and look forward to what we can achieve in the future.”

Shane Davis, Greenstone Group Managing Director, says Colliers is one of the most respected names in real estate globally and this investment in Greenstone is recognition of the strength of their experts and experience.

Licensed REAA 2008 HSBC Tower, Level 23 188 Quay Street Auckland 1010 portfolio.colliers.co.nz

This document has been prepared by Colliers New Zealand for advertising and general information only. Colliers New Zealand does not guarantee, warrant or represent that the information contained in this document is correct.

April/May 2023

Accelerating success.