Colliers Portfolio | Issue 2 2022

Colliers Portfolio Issue 2

Auckland’s amazing over-water hospitality venue 18 Tamaki Drive, Ōrākei More on page 04

Accelerating success.

April/May

2022

Recent Portfolio Deals SOLD

SOLD

2 Colliers Portfolio

32 Rennie Drive, Airport Sold by Tom Peterson, Brad Johnston, Paul Jarvie

SOLD

1a Edgerley Avenue, Newmarket Sold by Jonathan Lynch, David Burley

SOLD

212A Burswood Road Sold by Ben Cockram, Matt Prentice

693 Hillsborough Road, Mount Roskill Sold by Ned Gow, Gawan Bakshi

SOLD

73 Peel Street, Gisborne Sold by Jack Elliott

Contents Colliers Portfolio Issue 2 06

Okahu, 18 Tāmaki Drive, Ōrākei

Premium Listings

08

12

16

18

21

20

North Shore mega site set for sale

Elevated opportunity on Symonds Street

Meet the brokers

88 Willowbank Ave

Key Listings

New Zealand Research Report April 2022

With the first quarter of 2022 now complete, and the easing of Covid-19 restrictions in sight, activity in the market is on the rise. Our second edition of Colliers Portfolio for 2022 is a great example of how the market is eyeing up the remainder of the year, with a greater volume of stock coming to market and renewed enthusiasm from buyers and sellers to get results.

Transaction activity remains the strongest for well-located, high-quality properties, but buyers are keen to look at all opportunities.

Industrial and bulk retail remain the most popular asset classes, but our investment sales team has completed sales across all sectors of the market.

Some record yields continue to be achieved, such as a block of retail shops in Mount Wellington sold at 3.6%.

We have a broad array of opportunities currently available. Please find a premium collection of investments, development opportunities, and owner-occupier properties across New Zealand within our Portfolio.

Gareth Fraser Auckland Director | Investment Sales

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Front cover feature

Colliers Portfolio

04

‘Okahu’ Front cover feature Stunning Auckland City, harbour and island views

Auckland’s amazing overwater hospitality venue 18 Tāmaki Drive, Ōrākei

Recognised as one of Auckland’s premium event centres

For Sale by Deadline Private Treaty closing at 4pm, Thursday 5 May 2022

Venue caters for up to 250 people

Hovering over the sparkling Waitematā Harbour, Okahu currently operates as a sought-after function centre, but offers the opportunity for a new owner to explore alternative uses.

Potential expansion of existing facilities

Versatile range of potential uses

With substantial of car parking available this superbly positioned Tāmaki Drive property is truly an outstanding opportunity.

Contact the sole agent, Roger Seavill, to view property documentation and design concepts.

Featured News

One-of-a-kind on Ōrākei’s foreshore

Seavill says the property has an unrivalled location, which makes it a unique offering that will generate significant interest for a wide array of buyers.

“There’s a range of paths the new owner of this property could take as they look to maximise the potential of the site,” Seavill says.

Okahu’

uckland’s amazing over-water hospitality venue The property currently provides approximately

total floor space across three levels 8 Tamaki701sqm Drive,ofOrakei affording unparalleled views across the Waitematā or Sale by Deadline Private Treaty Harbour from its suspended positionclosing on the Thursday 5th May, 4pm foreshore. The property also provides access to the neighbouring car parking facility that offers 108 parking spaces.

Potential expansion unning Auckland Recognised as Venue caters for Versatile range of of existing facilities City, HarbourAdding & one Auckland’s up toof 250 people toofthe attractiveness the offer, new potential uses Island viewsowners premium will alsoevents be able to explore the opportunity to expandcentres. the total floor area to approximately iterally hovering over the harbour Okahu is an extraordinary addition to the foreshore of the Roger 1,000sqm, with a variety of plans already prepared parkling Waitemata Harbour.

Seavill 021 950 187

by the current owners.

While sought after as an outstanding function centre the property does offer the chance to explore lternate uses.Roger Seavill, New Zealand Special Projects

Manager at Colliers, has been exclusively appointed

With a multitude of car parking availablefor this superbly positioned Tamaki Drive property is truly an to market the property sale by deadline private utstanding opportunity.

treaty closing at 4pm on Thursday 5 May, unless Scan sold prior. o view property documentation including design concepts contact the sole agent.

the QR Code to find out more

The property for sale comprises three formations oger Seavill 21 950 187known as the ‘Valve House Deck’ and the ‘Extension’, which are subject to a ‘Right to Occupy’ via a seabed

olliers.co.nz/p-nzl67018576 license issued by the Auckland Council every 35

years. The vendor is presently working with the council to extend the license for a further 35-year period.

colliers.co.nz/p-nzl67018576

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Well-known by many guests and passers-by from road and sea, the property at 18 Tāmaki Drive, Ōrākei, known as the Okahu Events Centre in Okahu Bay, is recognised as one of Auckland’s most prestigious events centres and presents as a one-ofa-kind buying opportunity for discerning investors.

The remaining structure is the ‘Valve House’, which is owned by Auckland Council and is leased to Merlin Entertainments (owner of the nearby Kelly Tarlton’s), which in turn is subleased by the vendor.

This sublease originally included the Valve House Deck, but this was purchased by the present owner in 2018.

Colliers Portfolio

An unrivalled property nestled on the Ōrākei foreshore and suspended over the Waitematā Harbour’s water edge is being presented to the market for the first time in 22 years.

6 Colliers Portfolio

Office For Sale

Office For Sale

Two New Government Leases with CPI Increases

Two New Government Leases with CPI Increases 506 Eastbourne Street West, Hastings, Hawke’s Bay

506 Eastbourne Street West, Hastings, Hawke’s Bay For Sale Deadline Private Treaty closing at 4:00pm (unless sold prior) For Sale byby Deadline Private Treaty closing 12th12th MayMay 20222022 at 4:00pm (unless sold prior) NBS 2 2,200m floor $528,421 net rentalTwo brand Two brand 48carparks onsite new new48 onsite 2,200m² floor area area$528,421 net rental leasesleases pa + pa GST+ GST car parks

NBS

Recently Recently upgraded100% NBS 100% NBS upgraded

Purpose-built in 2012, this modern office complex accommodates Ministry of Social Development, providing social

Purpose built in 2012, this modern office complex accommodates Ministry of Social Development, providing social welfare services through welfare services through WINZ on ground floor and Oranga Tamariki on first floor. Split across two floors on two WINZ on ground floor and Oranga Tamariki on first floor. Split across two floors on two separate leases, this asset offers risk diversity. The separate leases, this asset offers risk diversity. The building is currently undergoing seismic strengthening to 100% building is currently undergoing seismic strengthening to 100% NBS, which includes a full internal upgrade and installation of new airNBS, which includes a full internal upgrade and installation of new airconditioning units. Given the country’s reliance conditioning units. Given the country’s reliance on social services, government tenants on new long-term leases has never been so attractive, on social services, government tenants on new long-term leases has never been so attractive, providing security and providing security and future proofing the investment.

future proofing the investment.

The property is conveniently located central to the CBD, and boasts one of the best carpark to office ratios in Hastings. Further upside can be The property is conveniently located central to theisCBD, and boasts oneby ofthe theadjacent best carpark to office ratios achieved in the 18 additional unleased carparks.

The building further complimented Devine café and restaurant.

in Hastings. Further upside can be achieved in the 18 additional unleased carparks. The building is further

Situated across fromby Silver Farms, Devine NZ Apples & Pears, Pak n’ Save, St John, Animates and Z Petrol, the commercial landscape in this area complimented theFern adjacent café and restaurant. is rock solid. The property enjoys excellent access to all arterial routes in Hawke’s Bay and only minutes from the Hastings/Napier Expressway.

Situated across from Silver Fern Farms, NZ Apples & Pears, Pak n’ Save, St John, Animates and Z Petrol, the commercial landscape in this area is rock solid. The property enjoys excellent access to all arterial routes in Hawke’s Bay and only minutes from the Hastings/Napier Expressway.

Jack Elliott Jack Elliott 021 876 765

Danny Blair 021 826 496

Danny Blair 021 826 496

021 876 765 colliers.co.nz/p-NZL67018669 colliers.co.nz/p-NZL67018669

7 Colliers Portfolio

Office For Sale Office For Sale

Elite Office Investment, Elite Office Investment, Hastings Hastings 507 & 510 Eastbourne Street West, Hastings, Hawke’s Bay 507 & 510 Eastbourne Street West, Hastings, Hawke’s Bay

For Sale by Deadline Private Treaty closing 11th May 2022 at 4:00pm (unless sold prior) For Sale by Deadline Private Treaty closing 11th May 2022 at 4:00pm (unless sold prior)

Expansive 1,900m² floor area

$389,196 net rental pa + GST

Fully tenanted

Good tenant covenant

72 car parks

Strategically positioned CBD fringe location

Strategically positioned CBD fringe This property is one of Hastings most significant commercial buildings. 507 & 510 Eastbourne Street West is located on location the fringe of the Expansive 1,900m2 floor area

$389,196 net rental pa + GST

Fully tenanted

Good tenant covenant

72 car parks

Hastings CBD neighbouring Hastings Pak’nSave and adjacent to Government tenant Ministry of Social Development.

property is one oflevels, Hastings most significant commercial buildings.

507some & 510 Street WestinisHastings. located TheThis building spans over two fully tenanted returning $389,196 net rental and offers of Eastbourne the best onsite car parking the fringe of the CBD, neighbouring Pak’nSave to Government tenant Ministry of Theon property has been wellHastings maintained, with the majority ofHastings the building at an NBS and ratingadjacent of 80% making this an appealing opportunity for Social investors.

Development.

The building spans over two levels, fully tenanted returning $389,196 net rental and offers some of the best onsite car parking in Hastings. The property has been well maintained, with the majority of the building at an NBS rating of 80% making this an appealing opportunity for investors.

Danny Blair 021 826 496

Danny Blair colliers.co.nz/p-NZL67018670 021 826 496 colliers.co.nz/p-NZL67018669

News

North Shore mega site set for sale A large retail site that is home to a collection of high-profile tenants who are signed to long-term leases in a prominent location on the North Shore is being presented to the market in what shapes as one of this year’s most impressive purchasing opportunities.

The offering at 15-29 Link Drive in Wairau Valley includes a large share of two freehold titles that are spread across 2.9ha of land and provides 13,107sqm of total floor area across multiple buildings. The property also has ample car parking.

The site is fully tenanted with nine tenants, including well-known brands in the retail and entertainment sectors such as Target Furniture and Hoyts cinema.

The property returns approximately $2.8 million in net annual rental income.

The majority of the property is zoned Business – Mixed Use Zone under the Auckland Unitary Plan.

Mixed use zoning is a flexible designation that provides for business activities from light industrial to limited office, large format retail, and trade

suppliers, to a multi-storey residential development, subject to subdivision. A small portion of the site, which is used for car parking, is zoned Business – General Business Zone.

There are multiple accessways to the site and excellent road frontage to Link Drive and the nearby State Highway 1, providing this sizeable landholding with unrivalled exposure to passing traffic.

Colliers Directors Shoneet Chand, Matt Prentice, and Ryan de Zwart have been exclusively appointed to market the property for sale by deadline private treaty closing at 4pm on Wednesday 27 April, unless sold prior.

Hoyts, Freedom Furniture, Early Settler, Jory Henley, Spotlight, and Target Furniture are the entertainment and retail tenants and most have lengthy lease agreements in place with further rights of renewal.

Wow Restaurant, Laserforce, the Hospice Shop, and a digital billboard make up the remainder of the

“It’s not overstating the potential of this property to say this is a once-in-a-lifetime purchasing opportunity given the strong tenant covenant on offer from this exquisite offering, the likes of which are rarely seen on the open market,” Chand says.

“It is also within a five-minute drive of the Takapuna commercial centre and is handy to a considerable area of built-up residential development in Glenfield and other popular North Shore suburbs that continue to experience impressive rates of growth.

“The surrounding area has a number of top-quality bulk retail premises, including Harvey Norman, Noel Leeming, Warehouse Stationery, Danske Mobler, and Briscoes.”

De Zwart, Associate Director of Sales and Leasing at Colliers, says the combination of a strong selection of notable tenants on a highly visible site in an accessible location makes this a supremely enticing property for prospective purchasers.

“This is a premier offering in one of the North Shore’s busiest retail precincts and we expect there will be significant interest in this property,” de Zwart says.

“We encourage all interested parties to do their due diligence and contact us immediately.”

“Target Furniture have a final expiry on their lease of January 2041, while Hoyts have a long-term lease with a final expiry of October 2036, which exemplifies the commitment of the high-profile tenants that are located in this premier building.

“Properties of this scale and prominence are seldom available to purchase and this looms as an incredibly exciting opportunity that will draw significant interest among a range of buyers. There is also future growth potential on offer with this substantial property.”

Shoneet Chand 021 400 765

Matt Prentice 021 464 904

Ryan de Zwart 021 575 001

Prentice, Director of Sales and Leasing at Colliers, says the property is strategically located, nestled among a range of blue-chip businesses in a busy shopping precinct.

Scan the QR Code to find out more colliers.co.nz/p-nzl67018576

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Chand, Director of Investment Sales at Colliers, says there is outstanding rental upside with this property given the length and strength of the lease agreements in place, which are spread across three sizeable buildings.

“The site is easily accessed off Tristram Avenue opposite the entry and exit from the Northern Motorway, which makes this commercial area a 10-minute drive from the CBD, via the Auckland Harbour Bridge,” Prentice says.

Colliers Portfolio

tenancy schedule. There are frequent CPI reviews in place across a strong majority of the tenancies, which are set to take place annually or every two years.

10 Colliers Portfolio

BOUNDARY LINES INDICATIVE ONLY

For Sale – Sole Agency Massive Wairau Opportunity 15-29 Link Drive, Wairau Valley, Auckland For sale by Deadline Private Treaty closing at 4pm Wednesday 27 April 2022 (unless sold prior)

Returning over $2.8 million pa net + GST

9 tenants across multiple buildings

National and international brands with long leases

Annual or two yearly rent reviews

13,106m² + 650 parks

Featuring national & international brands, wide motorway exposure, a large share of two titles with over 2.9 Hectares of mixed use land, easy rental upside and a fully tenanted popular development, 15-29 Link Drive really is a once in a lifetime opportunity!

With an annual net return over $2.8 million + GST, the offering is fully tenanted with many household brands such as Freedom, Spotlight, Hoyts etc having been on site for many years with long lease terms remaining.

This rare offering is incomparable in the current market and the future potential is endless given the lands Mixed Use Zoning, which would allow intensive commercial and residential development (subject to subdivision).

Shoneet Chand 021 400 765

Matt Prentice 021 464 904

colliers.co.nz/p-NZL67018389

Ryan de Zwart 021 575 001

11 Colliers Portfolio

Blue-chip investment 10 year lease to Countdown Countdown Regent - 11 Kamo Road, Whangārei Wednesday 11th May 2022 • • • •

New 10 year lease ASX listed covenant 3,785m² total GFA (approx.)

11,952m² total site area

BLAIR PETERKEN +64 21 421 426 blair.peterken@colliers.com

• • • •

$1,414,000 net rent est.

Recently refurbished Strong growth Centrally located

JASON SEYMOUR +64 21 607 999 jason.seymour@colliers.com

NIGEL INGHAM +64 21 562 919 nigel.ingham@colliers.com colliers.co.nz/p-nzl67018562

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13 Colliers Portfolio

Land and Development 88 Willowbank Ave, Napier

A rare opportunity to acquire a greenfield development site in the centre of Napier's expanding south.

Details on page 14

14 Colliers Portfolio

Land and Development Unprecedented Land Sale Opportunity 88 Willowbank Avenue, Napier, Hawke’s Bay

For Sale by Expressions of Interest closing 12th May 2022 at 4:00pm

8.1999 ha (more or less)

One of the few remaining development sites in Napier

Zoned Main Residential

Potential to consider part commercial use

Wide range of permitted activities

Prime location and proximity to Napier City Centre

A rare opportunity to acquire a greenfield development site in the centre of Napier’s expanding South.

Development sites of this calibre are highly sought after in this tightly held market given the central location, excellent proximity to schools, public amenities and substantial improvements by Council to the infrastructure in the area. The flat contour land holding is primed for residential development at scale and with the added benefit to consider the potential to request the allocation of the Te Awa Commercial Hub this opportunity is not to be missed.

Danny Blair 021 826 496 colliers.co.nz/p-NZL67018678

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For Sale by Deadline Treaty closing 4pm Thursday 5th May 2022 (unless sold prior)

Evan Parry House 43 Princes Street, Dunedin

Prime CBD Location

9 Storey Office Building

Good Holding Income

Evan Parry House is located in the heart of Dunedin City’s CBD (just south of The Octagon), situated in close proximity to many other recognised office buildings, including; Forsyth Barr House, Burns House, DCC Civic Centre, Otago House, ASB House, and many more. Evan Parry House is currently leased to multiple tenants providing a good holding income. The site consists of one freehold title with a land area of 495m².

Part of the ground floor and four of the office floors are currently vacant (approximately 1,416m2 total vacant area), opening up various options for buyers. Total lettable floor area of approximately 2,720m2

Dean Collins 027 499 0974 colliers.co.nz/p-nzl67018630

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Boundary Lines Indicative Only

News

Elevated opportunity on Symonds Street A highly visible office tower that has undergone significant capital investment offers buyers of all kinds the opportunity to secure a premier central Auckland asset with future growth potential.

110 Symonds Street, Auckland is a 10-level commercial office building with two wings providing 8,729sq m of total net lettable area on an impressive 1,852sq m freehold site that is zoned Business – City Centre Zone under the Auckland Unitary Plan.

The property, which has a 92 per cent NBS rating, provides three levels of basement parking for 166 vehicles, which can be accessed via the rear of the building from Saint Martins Lane.

Flexible leasing options are available given the split floor plate layout and the property has three lifts, while the site offers convenient access to Auckland’s bus network and motorways. The Karangahape Station for the City Rail Link will be in walking distance when it is opened in 2024.

The existing tenancy mix is diverse and provides $1,170,110 plus GST in total net annual rental income but there is room for significant growth from the areas of the building currently available for lease. When fully leased, the estimated net rental income is $3.1 million plus GST per annum.

Colliers Directors Blair Peterken and Jason Seymour have been exclusively appointed to market the property for sale via expression of interest and the deadline for offers closes at 4pm on Thursday 12 May, unless sold prior.

The building has received significant upgrades recently, including work on the lobby, new end of trip facilities, sprinkler installation, bathroom upgrades, plus services and passive fire upgrades. It also offers a gym on the ground floor.

The meticulously maintained property has a typical floorplate area of 925sq m split between the North Tower measuring approximately 325sq m, and the South Tower at approximately 600sq m.

Peterken, Director of Capital Markets at Colliers, says the property is well-presented and offers immediate growth opportunities.

Scan the QR Code to find out more

17 Colliers Portfolio

d prior)

rken 1 426

mour 7 999

Elevated Opportunity on Symond’s Ridge For Sale 110 Symonds Street, Grafton, Auckland

Expressions of Interest closing 4pm Thurs 12 May 2022 (unless sold prior)

8,729m² - total building NLA over 10 levels

1,852m² Business City zoned land

$1,170,111pa net passing income

$3,140,000pa estimated fully let income

Significant capital spent on recent building upgrades

166 carparks over 3 basement levels

Close proximity to CRL & motorway access

Opportunity to reposition the building or just lease the vacancy

Blair Peterken 021 421 426 colliers.co.nz/p-nzl67018453

Jason Seymour 021 607 999

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Investment Opportunity Trophy Grafton Headquarters 18

27 Nugent Street, Grafton For Sale by Deadline Private Treaty closing Wednesday 11th May 2022, 4pm (unless sold prior)

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Modern standalone building

Stunning fitout throughout

David Burley 021 478 225

Seismic upgrade complete

Short walk to CRL

12 Secure car parks

Vacant possession

Luke Baird 021 175 1179

colliers.co.nz/p-nzl67018660

Occupy or Invest in East Tamaki Occupy or Invest in East Tamaki Investment with Development Upside Occupy or Invest in East Tamaki 68G Greenmount Occupy or Invest in East Tamaki 68G Greenmount Drive, East TāmakiDrive, East 9Tāmaki Marjorie Jayne Crescent, Ōtāhuhu saleEast by Deadline Private Treaty closing 68Gsale Greenmount Drive, Tāmaki For

by DeadlineFor Private Treaty closing For Saleprior)

by Deadline Private Treaty closing May 2022 at 4pm (unless sold 68G Greenmount Drive, East Tāmaki For

by Deadline Private Treaty closing Wedsale 11 May 2022 atWed 4pm11 (unless sold prior) 4pm Thurs 19 May 2022 (unless sold prior) For sale

by Deadline Treatysold closing Wed 11 May 2022 at Private 4pm (unless prior) Wed 11 May 2022 at 4pm (unless sold prior) 532m² net lettable 532m² area net lettable area 532m² net lettable area Greg Watson

532m² net Container 11 allocated 11 allocated lettable car parks 11car allocated parks area Container friendly car parks friendly 11 allocated Container car parks Greg Watson friendly 021 083 13534

Container friendly 4,395m²

freehold site

NLA 1,453m² net lettable area

Returning $220,000 net p.a. + GST

Greg 021 083 Watson 13534 Ash Vincent Hamish West 021 083 13534 James Dickey Greg Watson James Dickey 021 442 201 021 882 737 021 026 81093 021 13534 James 021 083 026 Dickey 81093 021 026 81093 colliers.co.nz/p-nzl67018607 James Dickey colliers.co.nz/p-nzl67018607 colliers.co.nz/p-nzl67018688 021 026 81093 colliers.co.nz/p-nzl67018607

colliers.co.nz/p-nzl67018607

Buy One or Both - Invest or Add value

186 - 188 Onehunga Mall, Onehunga For Sale by DPT closing on 11 May 2022 at 4pm

190 Onehunga Mall, Onehunga For Sale by DPT closing on 11 May 2022 at 4pm

(unless sold prior)

Being sold individually or collectively with neighbouring building

Ned Gow 021 122 2731

Split risk with four tenancies producing $84,540 net p.a. + GST

Central position with great profile

Gawan Bakshi 021 31 31 48

Being sold individually or collectively

Ned Gow 021 122 2731

Potential to split tenancies and refurbish

Huge profile to Onehunga Mall

Gawan Bakshi 021 31 31 48

Gareth Fraser 021 242 6779

Gareth Fraser 021 242 6779

colliers.co.nz/p-nzl67018634

colliers.co.nz/p-nzl67018644

Standalone Corner Site

Standalone Gem 5 City Road, Grafton, Auckland For Sale by DPT closing Tuesday 17th May at 4pm (unless sold prior) Immediate Vacant Possession

Character Office Potential

Circa 448m² Floor Area

Tony Allsop 021 959 154

71 Plunket Avenue, Manukau For Sale by Deadline Private Treaty closing 4pm Wed 18 May 2022 (unless sold prior)

Brand new 5 year lease

Returning $434,000 net p.a. + GST

Fixed annual increases

Matt Plowman 021 209 9864

Mitch Broderson Ben Cockram 021 166 7225 021 245 5855

colliers.co.nz/p-nzl67018656

colliers.co.nz/p-nzl67018648

Josh Franklin 021 990 714

Colliers Portfolio

19

(unless sold prior)

Make your Mark on the Mall

Always Wanted - Hard to Find!

20

5C/417 East Tāmaki Road, East Tāmaki Auction to be held Wed 18 May 2022 at 11am (unless sold prior)

Colliers Portfolio

Near new build with double roller doors Greg Watson 021 083 13534

206.5m² net lettable area

Vacant possession

Josh Franklin 021 990 714

colliers.co.nz/p-nzl67018627

New Six-Year Lease 5/197 Montgomerie Road, Airport

For Sale by Deadline Private Treaty closing Wed 25 May 2022 at 4pm (unless sold prior)

Six year lease from Nov 2021 Tom Peterson 021 186 4483 Ben Cockram 021 245 5855

Returning $135,000 net p.a. + GST

Recently renovated 100% IEP

Josh Franklin 021 990 714

colliers.co.nz/p-NZL67018774

Prime Position | Longstanding Tenant | Growth Market

45 Vanguard Street, Nelson Buyer Enquiry over $2.1mil

Prime Position

Long Lease

Net Rent: $121,496

Geoff Faulkner +64 272136 266

colliers.co.nz/p-NZL67018650

Meet the brokers

Roger Seavill Manager | Special Projects Auckland CBD +64 21 950 187 roger.seavill@colliers.com

What is a transaction/project that you are particularly proud of?

"For me this would be the sale of the Countdown Supermarkets in Mosgiel and Stratford which were transacted last year working with the Auckland Capital markets team and Colliers New Plymouth office. We marketed the properties by deadline and received a number of bids for both assets at the closing date.

A sale for Mosgiel was concluded to a local family at a price exceeding $20m and a yield of 4.75%. This was a new record in terms of yield set for this type of investment in this part of the market. The sale of The Stratford asset was also concluded to a Dunedin investor group."

Dean Collins Director | Commercial Broker Dunedin +64 21 950 187 dean.collins@colliers.com

Why did you start? Why did you choose this career path?

"I met Mark Synnott coincidentally one evening and we got talking about Colliers. He mentioned a role that was going and thought I would be a good fit. I did a bit of research, and the more I looked into it the more I thought it was going to be a great, challenging career path for me and something I would be really interested in, so I took the role and never looked back."

What is your expertise?

"I grew up with a love for food & cooking, and always wanted to become a Chef. I eventually steered away from this idea and decided to study a Bachelor of Nutrition. I had a few hospitality jobs through university and my first position out of Uni was in a Food and Beverage marketing role. I am excited to focus on Food & Beverage specialty leasing as I feel as though I have a lot of value to add in this sector. "

New Arrival Alice Gray Leasing Executive | Retail Auckland CBD +64 21 030 3199 alice.gray@colliers.com

Colliers Portfolio

"Going back a bit in time but it would be June 1994. There had not been a new inner city apartment built in the CBD for 60 years. I won an appointment for Colliers to market the to be built “Seaview” apartment building in Short St, Auckland CBD. The appointment was to market the apartments off shore via our office in Hong Kong. Over the space of a weekend at the Hong Kong Hilton we sold 22 of the 28 two & three bedroom apartments. The remaining 4 we sold to one of the Hong Kong purchasers shortly after in Auckland.

Interesting in the context that those 28 CBD apartments in 1994 has been joined by over 21,000 since."

21

What is a transaction/project that you are particularly proud of?

New Zealand Research Report April 2022

COVID-19 peaks but its influence will linger

22

With light at the end of the tunnel shining brighter now that the Omicron peak has passed in an increasing number of countries, the conversation is inevitably turning to how its influence on property markets will impact future performance. What is becoming clear from the data we are collecting is that while some long-term trends are back, occupiers, investors and developers will need to blend new trends into their strategies for 2022 and beyond.

Colliers Portfolio

Office Vacancy accelerated rapidly to cyclical heights...

National surveys conducted by Colliers Research over the past two years clearly illustrate a rise in office vacancy rates. Auckland CBD’s office vacancy rate increased from 4.7% in December 2019 to 10.9% in December 2021. Auckland’s metropolitan office vacancy rate reached 8.1% in March 2021, having sat at 4.7% two years earlier. In Wellington, where the market is strongly underpinned by government occupation and the level of inventory is influenced by the removal of stock for seismic strengthening, the rise in vacancy has been less pronounced, but still evident. The overall vacancy rate at 6.3% remains slightly above the cyclical low of 5.9% recorded in mid-2019.

...but it looks like we’re at or close to the peak.

But looking at the shifts in vacancy trends at a more granular level, the peak in vacancy has already passed in Wellington with the overall rate declining from 6.7% to 6.3% between June and December 2021. In the Auckland CBD and metropolitan office markets, the rate of increase in the overall vacancy has slowed over the last 12-month survey period. Auckland’s prime vacancy rate has already reduced. This indicates the worst of the vacancy rate hike

Source: Colliers Research

is likely over and therefore 2022 will become a pivotal year of change.

So, what does this mean for the future of office?

The office provides many advantages from a workplace perspective in that it promotes collaboration, innovation, creativity and productivity and strongly supports the building of company culture. However, these features work best when the working environment is at its best.

This is not just a discussion point as it is already apparent in leasing activity and vacancy data over the past six months. While secondary vacant space is languishing, high quality, flexible and environmentally friendly office premises are outperforming.

It is the strong demand for prime space that is turning the tide on the lift in overall vacancy rates, enabling the peak in vacancy to be reached and a downward trajectory just around the corner.

It is therefore the flight to quality trend that shines as arguably the most prolific illustration of the consequence of COVID-19 on office space demand, and there is no going back now. It will be an ongoing influence upon office market demand dynamics well into the future.

So, what about remote working’s future?

Vacancy rate peaks highlight confidence in the physical presence of office space for businesses. However, over the past two years, it has also become apparent that remote working provides its own set of advantages. The opportunity cost and pricing of commuting is a key factor, especially in a high inflation environment, as well as the flexibility and autonomy remote working can provide employees. Many also purport a work-life-balance can be maintained without any loss in productivity, especially if trust, communication and transparency are adhered to.

But Covid-19’s interconnected influences on the industrial sector will drive rents higher

Low interest rates from accommodative monetary policy drove up investment and development activity to record levels. Suitably zoned greenfield development land was snapped up, and construction cost rises from supply chain issues and labour shortages forced land values up. With ongoing inflationary impacts, a result of lingering Covid-19 impacts, much higher rentals need to be achieved for developments to be financially feasible. While fragmentation and a high proportion of private ownership in the industrial sector will likely keep excessive rate increases down, market reviews and inflation linked rent reviews will arise. Higher rents will also assist to offset some of the rising servicing costs for owners when interest rates rise.

But, perhaps most importantly, will our resilient occupiers be able to afford it?

Source: Colliers Research

Industrial Demand drivers have been phenomenal In contrast to the office sector, demand drivers within the industrial market have strengthened over the last two years with vacancy rates remaining at or near historically low levels. In Auckland, overall vacancy now sits at just 1.9% with leasing options an extremely limited occurrence for an extended period of time. In Wellington, overall vacancy currently sits at 2.0%.

Once again COVID-19 enforced lockdowns have been influential. Logistics companies have experienced sharp increases in demand fuelled by a significant increase in online shopping. According to figures released by New Zealand Post, the value of annual online shopping increased by 54% between 2019 and 2021 to reach $7.7 billion. While this rapid rate of growth is unlikely to be repeated, the COVID-19 pandemic has brought about considerable change to people’s spending methods.

Online shopping’s popularity has grown and will now be a part of many more people’s lives due to COVID-19.

Further, the construction sector has also boosted demand with building consent issuance reaching record levels, while the pipeline of infrastructure projects has been growing apace. Supply-chain disruption has even boosted warehouse and yard space demand for storage purposes as people use a just-in-case over a just-in-time inventory model.

The surge in demand for our commodities in the rural sector has also been a key driver of the industrial sector, boosting warehousing and logistics requirements as well.

Retail – differences in sub-sector performance to persist While the overall impact of the COVID-19 pandemic on the retail sector has clearly been negative, it has not been uniform across the market’s various sub-sectors.

In Auckland, the overall vacancy rate has risen from 3.3% as at December 2019 to 4.8% in December 2021.

However, in more recent times, strip retail vacancy outside of the CBD, as well as in Shopping Centres and Bulk Retail Centres have started to experience declines.

Wellington’s CBD has also showed its resilience with a decline in vacancy as well. This is in contrast to the Auckland CBD which has experienced one of the largest, and most rapid, increases in vacancy that we have recorded in 25 years.

Over the December 2019 to December 2021 period, vacancy within the Auckland CBD, where the reduction in foot traffic has been exacerbated by work from home guidance, has increased from just 1.4% to 14.4%.

The reopening of the border, more normal retail conditions and an increase in office occupation due to more people returning to work will make the difference, but it will take some time. Many of the changes that consumers have adopted over the past two years will be hard to shake off, while the inflationary environment will also shape consumer demand.

A continued disparity in the performance between sub-sectors will therefore persist for some time, but data shows many sectors are now experiencing some greater positivity in leasing activity. Rising costs will skew spending towards essential goods with discretionary spending squeezed. This, along with convenience and the provision of ‘experience’ retail will underpin demand for supermarkets, bulk retail centres, destination malls, suburban centres and strip retail with an edge.

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While high occupier and investor demand and low building and land supply have been the most significant trends influencing the industrial market over recent years, this is likely to give way to a new trend – increasingly higher rentals.

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While the workplace of the future will therefore involve remote working, it is most likely that it will predominantly materialise as a component of the hybrid working model, where people work in offices and remotely, not one or the other. This will also lead to an increase in the multiplicity of leasing structures emerging for occupiers, such as ‘hub and spoke’ and the greater utilisation of flex space operators. However, first things first. Businesses will need to ‘earn the commute’ of their staff again after long periods of non-office-based activity.

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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 2022