"Investor demand remains strong and this quarter has ended positively with our concluding a record number of transactions and many larger sales," Urlich says.
Prefacing Barfoot & Thompson Commercial’s first 2016 Insite portfolio publication he says the tax effectiveness and assured gains from 'bricks and mortar' continue to out-perform the low returns from traditional bank accounts.
Urlich says the new portfolio contains 29 properties throughout Auckland and includes offerings in Whangarei District, Paeroa and Warkworth.
"It offers a wide array of opportunities for investors, developers and tenants with 13 properties for sale and seven for lease. Five development sites in Auckland central, New Lynn, Glen Eden, Takanini and the Whangarei District are also featured in the portfolio.
"Three of the properties are being sold by tender, four are going to auction and two are being sold by deadline private treaty."
Urlich says the supply of available listings remains tight and the strain on the leasing market is not dissimilar, with low vacancy rates a consequence of the lack of available stock.
Auckland’s property markets have continued to strengthen
"Auckland’s property markets have continued to strengthen over the last 12 months. Investor demand for stock continues to outstrip supply and, combined with low interest rates, has created downward pressure on yields.
"Vacancies for industrial property right throughout the Auckland region are at all times lows, putting pressure on rentals, incentive levels and land prices."
Urlich notes that the volume of sales during 2015 was down from a peak in 2014 but continued to exceed the long term average.
"The volume of sales was limited by a lack of stock rather than investor demand or access to credit," says. "However, the challenge associated with sourcing sufficient good quality property investments in Auckland has increased investor interest in Wellington and in the provincial centres."
Urlich says the retail market has "an interesting dynamic" with retailers competing strongly against each other for market share in traditional shopping centres as well as on Main Street.
"Demand for retail space has been mixed over the last year with vacancy rates falling in some locations while others experienced an increase."
He says the industrial market has continued to go from strength to strength with demand from occupiers similarly continuing to push down vacancy rates and good quality vacant stock becoming increasingly difficult to find.
Prime rents have started to increase
"As a result, prime rents have started to increase and are rapidly approaching levels experienced at the peak of the 2007/2008 cycle. Land values have continued to increase and development sites costs are $350 to $400 per square metre in established areas with the demand for new modern premises continuing to be unsatisfied."
Urlich expects Auckland’s economy will continue to grow and out-perform the national growth rate. "Population growth in excess of three per cent per annum, increased construction activity, growth in tourist arrivals, and low interest rates all support the continued expansion of the local economy. The growth in Auckland’s economy will continue to drive growth in commercial and industrial property markets."