Commercial Property Can Be Rewarding

Commercial property returns shine as bond yields fall and capital gains kick in; income returns stable
May 15, 2013
David Chaston

Returns on New Zealand commercial property rose slightly in the March 2013 quarter and reached 10.6% p.a., according to the latest research done for the NZ Property Council by research house IPD.

From a survey of 566 major properties in 29 property portfolios, the total capital value has now reached NZ$11.7 billion.

Returns in the survey include both “income returns” and “capital returns”.

The “capital returns” are based on revaluations, and 83.4% of properties surveyed were revalued in the March 2013 quarter.

Income returns were pretty stable across the three sectors surveyed – retail, office, and industrial – at about 8.2% pa. (the Capitalisation Rate ).

Capital returns were highest for retail properties, adding 4.2% to the income returns for a total annual result of 12.4% pa

Read the rest here:

http://www.interest.co.nz/property/64468/commercial-property-returns-shine-bond-yields-fall-and-capital-gains-kick-income-retu

 

 

Posted in News & Articles | 2 Replies

2 thoughts on “Commercial Property Can Be Rewarding

  1. Can you share any tips on finding good sources of finance for commercial property? Banks will only lend 65%.

  2. If the standard banks won’t help there are non-bank lenders who will. Since the demise of finance companies it’s become harder to get loans over 66% but non-bank lenders may go to 70-75% for the right building. The interest rate is higher of course and can be anywhere from 8% upwards depending on the risk and desperation of the borrower.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>