Big portfolio sign of economic times

Included in the Total Property portfolio are 23 shops at the Westgate Shopping Centre in Massey, West Auckland. Photo / Bruce Clarke

While the economy appears to be through the worst of the recession and currently in recovery mode, the consequences will continue to unravel in the property industry throughout much of 2010, says Mike Bayley, managing director of Bayleys Real Estate.

"Tight bank lending policies are continuing, forcing borrowers to either refinance or sell down their real estate exposure," Bayley says in his introduction to Bayleys' first Total Property portfolio of commercial and industrial properties for 2010, which has just been released.

"Concurrently, a realigning of business activities means 'fringe' properties not essential to core business will continue to be sold off as part of corporate rationalisation."

As a sign that investors are likely to have plenty of options to choose from this year, Bayley says the agency's first Total Property for 2010 is the largest ever produced for this time of the year, with 125 properties and businesses on offer from all around the country.

Bayleys is handling the sale of $75 million of New Zealand Retail Property Group's holdings encompassing 23 shops in the Westgate Shopping Centre in Massey, West Auckland, and 12 outlets in the Fraser Cove Shopping Centre in Tauranga.

They will be auctioned on March 11.

In another big corporate sell down, Carter Holt Harvey has placed 29 central North Island dairy farms on the market. With a combined estimated value in the region of $224 million, this is the biggest corporate farm sell-down of its type ever seen in New Zealand.

However, on an upbeat note, Bayley says the agency experienced a relatively good year in 2009.

"It wasn't a great year by any means, but it was considerably better than 2008, with our residential sales volumes up by 30 per cent on the back of a bounceback in that segment of the market.

"The value of our commercial and industrial transactions also grew by close to $300 million as a result of a combination of factors - lower interest rates, a retreat to 'bricks and mortar' and trusted brands, given the turmoil in global equity and financial markets, as well as a number of attractive investment portfolios hitting the market."