Hot demand for commercial property
New Zealand has been rated a commercial property investment hot spot by one of Asia's largest investor organisations.
The Asian Association of Non-Listed Real Estate Investors (ANREV) represents property investors, mainly non-listed managed funds, that have combined property portfolios worth more than US$2 trillion (NZ$2.3t).
It has surveyed its members on their top locations for investment in the Asia-Pacific region this year, and for the first time in the survey's history New Zealand made it into the top 10, coming in at number eight.
Justin Kean, the head of research at JLL (formerly Jones Lang LaSalle) said the amount of capital coming into the commercial property market from both domestic and international investors was driving down yields.
"Institutional investors are back in buying mode and this means that foreign wealth will start finding its way into the New Zealand property market," Kean said.
If ANREV's members invested the equivalent of just 1 per cent of their assets it this country it would see US$20 billion in new capital coming into the country, he said.
However that would be unlikely, because JLL's research showed the total value of all commercial property sales made in this country last year was just over $2b, the highest since before the global financial crisis.