Mark Synnott – 
Following a record year of sales volume, low vacancy rates and yields I see little reason for that trend to change in 2016.
Two key features will underpin the confidence and demand in the commercial property market for the next 12 months: historically low interest rates and population expansion.
Population growth was a key tenet of my predictions for last year (2015).
It will remain a driving force behind major commercial developments in 2016.
New Zealand’s net migration gains show no sign of letting up, and population – specifically in Auckland – will provide the impetus for more major commercial developments.
Low yields
Record low yields will also feature again in 2016, purely because of demand.
There is a lot more money available for investment than there are properties to be invested. The record low CBD office and industrial vacancy rates in Auckland will continue as an acute barometer of this trend.
The residential market is also placing greater focus on density to alleviate demand and price pressures, and this will increase the attractiveness of quality apartment projects such as Alexandra Park.
As predicted last year, New Zealand’s commercial property market is still seeing the beginnings of the ‘great wall of money’ on offer from China.
The sheer weight of capital available from Asian investors who want to find a home for it in international markets is massive, and New Zealand is an extremely attractive location.
I predict that activity within the retail property sector will also be very notable in 2016, particularly coming off the back of significant momentum late last year (2015) where Colliers’ Capital Markets team transacted a record $1 million in sales in less than six months, anchored in the main by Westfield shopping centres ($549 million) and Countdown supermarket ($287 million) sales.
Tourism New Dairy
I also see a strong case for ‘tourism becoming the new dairy.’
New Zealand is currently enjoying a major tourism boom, with more than three million international visitors visiting our shores for the first time in a one- year period. This represents an 8.1% increase on the previous twelve months, and our hotel property market is reflecting that.
Colliers Hotel division is witnessing the first stages of the next transaction cycle with more than $290 million in sales recorded in 2015, up a staggering 500% over the same period in 2014.
Mark Synnott is Chief Executive of Colliers International New Zealand.
