'Mums and Dads' offered investment in revamped central Christchurch buildings

"Mum and Dad" investors will soon have the opportunity to invest in two redeveloped Christchurch buildings.

Developer Richard Diver's Countrywide Property has sold the commercial buildings for $58 million to a property syndicator.

Diver was one of Christchurch's earliest post-earthquake movers and transformed Victoria St. Many of his redeveloped buildings are recognisable by their characteristic earthquake-resistant exposed crossed steel girders. 

The buyer is Silverfin Capital whose managing director Cheryl Macaulay said her company will offer 634 investment parcels of $50,000 each to investors.

The two properties in the latest deal include the ex-Deloitte building at 32 Oxford Tce in the health precinct and leased to the Canterbury District Health Board, and 104 Victoria St leased to software firm Telogis. There are also ground floor retail tenants.

The $58m transaction surpasses the value of an industrial Christchurch property sold a couple weeks ago worth $47m, which set a record at the time.

Savill's brokered the deal. Its managing director Jonathan Lyttle said there were relatively few commercial buildings coming to market and he had several offers on Diver's buildings.

Lyttle said a recent trend arising from the Reserve Bank's tighter residential loan to value rules was more interest in commercial offerings, plus more interest in residential purchases outside Auckland where the higher prices and LVR rules made investment difficult.

The number of new Christchurch office buildings funded by insurance money has lifted the central city vacancy rate to 22 per cent, making tenanted buildings more attractive, according to agency JLL's latest research.

Meanwhile, Silverfin Capital has marketed other syndicates in Auckland and Hamilton this year. 

Syndicated properties offer stability compared with sharemarkets, and higher interest rate returns -generally around 6 per cent to 8 per cent compared with bank deposit rates currently less than 4 per cent.

The risks include difficulty cashing up, less diversity, and possibility of tenants defaulting on rent or quitting at the end of a lease term


Ref: Stuff.co.nz article, 23 Sep 2016