Commercial returns at six-year high

It has released its latest Property Index results, for the quarter ended September 2014.

The index reveals a total composite return for all classes of 12.9% which is comprised of 7.6% income return and 5% capital growth.

The index is produced in conjunction with real estate data provider IPD.

Anthony De Francesco, executive director of IPD in Australia and New Zealand, said:  “The strengthening investment return profile reflects a combination of favourable occupancy market fundamentals, underpinned by strong macroeconomic conditions. The stronger return profile is likely to be experienced across all commercial property sector markets.”

Industrial property is also at its highest level of returns since 2008, returning 12.2% for the year to September. Retail returns were 11.1% for the quarter, up 9.5% from the preceding quarter but below the 2012 peak of 13%.

Property Council chief executive Connal Townsend said:“The IPD results this quarter should continue to give confidence to New Zealand and international capital markets that the New Zealand commercial property sector is a desirable investment option. Results across all three main sectors show a steady performance both in terms of capital growth and income return.”