Three Auckland office buildings sold

CATHERINE HARRIS
Last updated 13:54 13/08/2014

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A trio of office buildings in Auckland's CBD has been sold to a Hong Kong-based family for $65.5 million.

The broker involved says many more Asian investors are keen on investing here.

In one of Auckland's biggest commercial property deals this year, the family bought two buildings in Fort St, and the Shortland Chambers at 70 Shortland St, in an off-market transaction.

The seller is Shortland Trust, a private firm owned by a husband and wife.

Kevin Richards, head of capital transactions at Savills New Zealand, brokered the deal and said the firm knew other Asian buyers who were interested in acquiring buildings worth up to $250m here.

However, few acquisitions had been made because central city Auckland assets were tightly held.

"We've got a number of Asian-based private companies and institutional groups and they are now looking at New Zealand as an option to buy," Richards said.

"The problem with Auckland, of course, is getting the right product for them. We're such a small market, it's easy to get orders but not that easy to fill them."

Australia had until recently been seen as the stronger investment market "but we're now seen as a shining light [and] our economy appears to be doing well. Not as well as China, but it's more difficult to buy in China.

"Diversification in New Zealand is certainly on the radar now."

Richards said the Hong Kong family at the centre of the deal had been attracted to New Zealand because of yield and as a possible retirement destination.

The properties had a yield of 7.25 per cent compared to lows of just over 5 per cent in Sydney and 2.5-3 per cent in Hong Kong or Singapore.

The family was likely to buy more properties in New Zealand over time and would probably to come here to live, he said.

"One of the attractions of living in New Zealand is they then follow on their retirement and take occupation in New Zealand as well."

Chinese investors ''like our economy, they like our food, they like our recreational opportunities and ... they feel safe here".

The purchase did not require Overseas Investment Office approval as it was not on sensitive land or for more than $100m.

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