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LOCAL AUTHORITY PROPERTY ASSOCIATION CONFERENCE CONNAL TOWNSEND

LOCAL AUTHORITY PROPERTY ASSOCIATION CONFERENCE CONNAL TOWNSEND

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LOCAL AUTHORITY PROPERTY ASSOCIATION CONFERENCE

CONNAL TOWNSEND

www.propertynz.co.nz

“The role/relationship between local government and commercial property development (and where it’s heading)An update of the sectorEQB and seismic strengtheningLocal government amalgamationPlanning (including RMA reform, housing supply issues and infrastructure)”

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OFFICE

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MULTI-UNIT RESIDENTIAL

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INDUSTRIAL

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PUBLIC

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RETAIL

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CITIES ARE ECONOMIC DRIVERS

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CITIES CONTROL CAPITAL MARKETS

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IPD INDEX RESULTS TO OCT 2014

12.9%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14

Total return for direct commercial propertyannual return on quarterly periods to September 2014

Capital return Income returnTotal return Long-run average Source: IPD

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IPD INDEX RESULTS TO OCT 2014

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IPD INDEX RESULTS TO OCT 2014

0%1%2%3%4%5%6%7%8%9%

10%11%

Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14

Commercial property cap rate vs bond rateperiod ending September 2014

spread NZ: All property TB rate

Source: IPD.

GFC

Lehman Broscollapse

cap rate: c7.6%average spread: c370bps

cap rate: c7.0%spread: c55bps

cap rate: c9.0%spread: c300bps

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BUT LOCAL GOVERNMENT ALSO FRUSTRATES US

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BUILDING ACT

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CONSTRUCTION PRODUCTIVITY

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HOUSING SUPPLY & AFFORDABILITY

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HOUSING SUPPLY & AFFORDABILITY

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PLANNING

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HOUSING SUPPLY & AFFORDABILITY

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EARTHQUAKE

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FUNDING LOCAL INFRASTRUCTURE

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LAND DEVELOPMENT AGENCIES

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LOCAL BODY AMALGAMATIONS

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QUESTIONS?

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THANK YOU

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