We’ve had a record quarter at James Group, we are experiencing strong form midway through the year, but are very conscious and wary the job is only half done, and we remain as motivated and dedicated as ever to perform for our customers and clients alike. The continued momentum of buyer confidence both in the property market and the business sector is resulting in strong levels of transactions and full sales pipelines. The abandonment of the proposed capital gains tax combined with the lower OCR rate sets the precedent for prolonged buoyancy in the commercial sector.
Commercial Property is on the radar
Mum and Dad investors are looking for more viable investment options stepping away from the traditional idea that the residential arena is the place to bank their money. The commercial sector provides more bang for their buck given the strong rental yields, less outgoings, with commercial tenants generally covering these costs and longer leases in place with reliable tenants.
The limited stock offered to the market is forcing buyers and tenants further out of the core industrial and commercial hubs. With the city sprawling, public infrastructure investment on road and rail is making areas as far South as
Drury and Pukekohe more accessible. There are still greenfield land pockets and economies of scale deals to be found in these locations. Split risk investments are noticeably gaining popularity with buyers wishing to maximise returns with these properties providing multiple rental income streams.
We are now turning our focus to Q3 and we are excited about the state of the market, the opportunities that are available and the proposition of another bumper few months.
We have seen the OCR rate drop from 1.75% at the beginning of 2019 to 1.5% in May 2019 which is the first cut in the rate in two and half years. RBNZ stated on June 26^th that this rate would remain unchanged, but hinted a possible cut could be on the agenda come August.
“The current extreme low interest rate environment not only represents an opportunity for new buyers to enter the market, but for existing mortgage customers to pay off as much of their debt as possible,” says ANZ managing director Antonia Watson.
The market sentiment around further lowering of the OCR is positive. Commercial and Industrial Property offerings dwarf Term deposit rates even before considering the bonus of capital uplift.
The LVD Auctioneering Invitational was held in Queenstown in early April 2019. On of our agents, Jordan Palmer, was invited to attend his first ever senior competition after winning the novice division in 2018.
Jordan represented James Group and was keen to enhance his skills and further prepare for National Auctioneering competitions. He came up against seasoned callers and tested his mathematical prowess. The aim of the competition was “Be Your Best Self”! with viewing options available via GAVL and live streaming on Facebook. This gave the opportunity for Agents and Business owners to see the calibre of callers available.
Jordan went on to compete at National level on the 24/25th June 2019 at the REINZ Auctioneering Champs. Here he was up against some stiff competition, however Jordan held his own and gained some valuable experience, preformed well under immense pressure and made his presence known. Jordan has a big future and we look forward to watching this unfold.
Crystal Ball Gazing
The strong performance of commercial & industrial properties is set to continue. Our sales team are looking into more off-market opportunities to provide purchaser’s and tenants more options given the limited stock currently available. Interest in up and coming areas are becoming more favourable options and more investors are awakening to the strong offering of commercial and industrial property.
Our James Group Property Managers have had another successful quarter, assisted by the addition of a Property Management Coordinator- Cynthia Lam, who joins us in a much needed support role to help the constantly growing management division.
Overall the team is stronger than ever before and is looking to continue the strong growth seen within our management portfolio (now at over 300 tenancies Auckland wide, both commercial and residential). Our fresh approach has us tailoring our services to meet your needs. Whether it be facilities management, a more specialised asset in need of more frequent inspections or having an in-house agency team to minimise your vacancy, our Landlords are enjoying a renewed property management experience.