Queenstown loses first ranking in commercial property market

Queenstown has slipped to second place in a survey in national commercial property investor...
Queenstown has slipped to second place in a survey in national commercial property investor confidence. Photo: Stephen Jaquiery
Investor confidence in New Zealand’s commercial property market is at a two-year high, new research shows.

Colliers International’s latest quarterly survey found national commercial property investor confidence reached a net positive 26 in the December 2018 quarter.

Of the 12 regions surveyed, 10 recorded a net positive score (optimists minus pessimists).Confidence is particularly strong in Tauranga/Mt Maunganui, which has eclipsed Queenstown in investor confidence for the first time in almost four years.

Tauranga/Mt Maunganui had the highest net positive score at 57, up 6 percentage points from 51 the previous quarter.

Queenstown slipped to second place after topping the survey for the past 15 consecutive quarters.Confidence dipped to net positive 46, down 11 percentage points from 57 the previous quarter. The top five was rounded out by Wellington (41 net positive) and Auckland and Nelson (39 each).

Simon Clark, Managing Director of Colliers International Tauranga, said the results reflected Tauranga’s ongoing growth.

"Both Tauranga and The Mount are experiencing a major commercial property boom. There’s record low vacancy across all the key commercial sectors — office, retail and industrial — which is driving down yields and pushing up rents. Investors see Tauranga as being more affordable than Auckland but offering equally strong fundamentals and returns."

Nationally, retail property sentiment appears to be gaining positive momentum.

Colliers International’s Director of Research and Communications, Chris Dibble, said retail rose from a net negative rating to a net positive 4 nationally.

"Confidence increased from a net positive 12 last quarter to 25 in the latest quarter."

Mr Dibble said the industrial sector was continuing to flourish.

"Industrial is at an almost three-year high, at 46 net positive nationally — the best result since the March 2015 quarter."

• Colliers International’s latest quarterly Commercial Property Investor Confidence Survey drew on 1636 responses.

- Paul Charman

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