Savills Clinches Christchurch’s Biggest Deal for 2016

Countrywide Property has sold two prominent central Christchurch office and retail buildings, at 104 Victoria Street and 32 Oxford Terrace, to Silverfin Capital Ltd for $58m following deals negotiated by Savills Real Estate.

The sale is the largest property deal in Christchurch this year and follows the city’s largest lease deal of the year, also negotiated by Savills, to Hoyts for a central city site opposite the bus interchange.

Jonathan Lyttle, Managing Director of Savills Christchurch office, said the sales were concluded at a time when good quality commercial investment stock in Christchurch is in high demand and increasingly difficult to come by.

“New investment assets in good locations are highly sought after in Christchurch. There is very limited supply of prime investment stock and the few buildings that are coming to the market are getting snapped up – we had several offers for both these properties. This demonstrates the ongoing appeal of good quality commercial assets, which offer investors very good returns in a low interest rate environment.”

Silverfin Capital intends to sell down the buildings to individual investors, offering 634 proportionate ownership units in the assets priced at $50,000 each. The company is a licensed manager of Managed Investment Schemes that invest in real property or property syndicates/real property proportionate ownership schemes.

Cheryl Macaulay, Managing Director of Silverfin Capital, said the buildings represented excellent investment stock.

“Both these assets are well located, with great tenants, good lease tenures, and excellent seismic strength. They are the type of solid investment assets that Silverfin is happy to put its name to and add to our growing portfolio around the country.”

Silverfin, which began operating earlier this year, has also offered proportionate ownership schemes in commercial buildings in Hamilton and Auckland this year.

Lyttle said he and his fellow Savills agents had noted a “definite trend” of greater numbers of residential investors looking to buy commercial property.

“The already tight commercial investment market is now under even more pressure, with interest rates lower and LVR restrictions in place. This is prompting individuals who might have previously only owned residential investments to look at diversifying into commercial property. Proportionate ownership is a great way for these individual buyers to access the superior returns that are available on commercial assets.”

104 Victoria Street

The refurbished five-level office and hospitality building at 104 Victoria Street is home to US-based GPS software firm Telogis, Chinwag Eathai restaurant & bar and Total Fitness gym.

Savills received several enquiries from buyers given its “trophy” status on a popular hospitality, retail and office strip, said Lyttle.

“This high-profile spot on busy Victoria Street is hard to beat as an investment location. Add in the reputable developer, quality building and excellent tenant mix, and you have a very attractive set of investment fundamentals.”

Countrywide Property bought the earthquake-damaged 3438sq m building and completed major refurbishment and strengthening work to 100% of new building standard in 2014. “The refurbishment project has transformed the building into a stunning modern structure with plenty of natural light and a contemporary fit-out,” Lyttle said.

The three tenancies generate annual net rental income of just over $1.4m, with rent reviews built in to the leases. The 1415sq m site has dual street entry points from Victoria St and Montreal St, as well as on-site car parking.

32 Oxford Terrace

The five-level riverside building at 32 Oxford Terrace, previously occupied by Deloitte, has been extensively redeveloped and is mostly leased to Canterbury District Health Board. It also offers ground floor retail and hospitality tenancies.

During Countrywide’s redevelopment project, the building was gutted, strengthened, extended and reclad in glass. Pedestrian access through the site links Oxford Terrace to Tuam Street.

It is the first completed building in the health precinct and provides the latest sustainable technology including sensor-controlled LED lighting and high-performance glazing.

Countrywide Managing Director Richard Diver said the buildings’ sale will help fund other projects his company is working on in Christchurch.