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As commercial property markets gather momentum and begin to enter into a new phase of the cycle, property consultants Jones Lang LaSalle are observing several new trends that are resulting in both higher levels of appetite for core properties as well as the emergence of non-core plays.
There has been considerable market commentary around a strong market preference for core properties as evidenced by recent sales such as One Queen Street, the GHD building on Napier Street as well as the anticipated sale of the Telecom Building on Victoria Street.
Jones Lang LaSalle is also witnessing a large number of international buyers that are rotating back into the market and this implies that the ‘counter cyclical players’ – or the smart money, is back in the market. New Zealand for many international investors is no longer considered a core market in their strategy and hence has spent the last 18 months to 2 years trying to exit. As other markets become overheated however, such as the Australian REIT market which last year raised over AUD 1 billion in new capital, we are likely to see that capital return over the medium term.
These tightening market trends are being witnessed across Asia Pacific where Jones Lang LaSalle has a 33% market share across the transactional market, more than any other broker. This market coverage has provided the company with significant insight into the overall market direction in the Asia Pacific region.
Ultimately, we are heading in the direction of a recovery. Yet, until the economy is firing and the corporate sector is growing their occupancy requirement there remains opportunities to get into the market ahead of the tenant driven uplift.