Goodman fetches $33.2 million with sale of IAG buildings

In the biggest commercial office sale in Christchurch this year, Goodman Property Trust has sold the buildings largely occupied by IAG’s Christchurch offices in Addington. The two buildings fetched $33.2 million, representing a 7.8% yield, and were bought by a group of Queenstown investors led by lawyer Ron Mackersy. The properties were sold by Hamish Doig and Mark Macauley of Colliers International in Christchurch. Doig said he believed the blue chip properties in Show Pl attracted immense interest because of the quality property and tenant. "This is just the sort of property that investors are seeking. In this instance, the buyers wanted the buildings to add to a small portfolio, which included two retail sale and leasebacks to The Warehouse - making a nicely diversified portfolio at an attractive yield. There’s considerable interest in Christchurch commercial property - both from local investors but also throughout New Zealand and syndicates are increasingly active. "With bank interest rates at low levels, commercial property remains a highly attractive alternative." Show Pl is a premium campus style estate, comprising 25,000m2 in total of modern office accommodation with a range of on-site facilities. The IAG building at 12 Show Place and the gym and café at 14 Show Place have a total net lettable area of 7881m2 and the insurer has a nine year lease expiring in 2025 with further rights of renewal. Andy Eakin, Chief Financial Officer of Goodman (NZ) Limited, said in a release to the NZX, that the sale was in line with the Trust’s asset recycling programme. "Ongoing asset sales are currently the preferred source of funding for new development activity. It’s a successful and sustainable approach that is improving the cash earnings of the Trust while enhancing an already high quality property portfolio." The unconditional sale is expected to settle on 25 November 2015.