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The German investor ‘Thiel Family’ confident in the New Zealand property market

Tags: Auckland Commercial Wellington

The steady yet continuous fall of the New Zealand dollar against the US-greenback over the past six months has sparked one of the country’s biggest commercial property owners to ‘put out the feelers’...

...for acquiring more large buildings and tower blocks in Auckland and Wellington.

The Swiss-based property investor has substantial real estate assets around the world – including Europe, Canada, Australia and New Zealand.

The Thiel family’s New Zealand portfolio contains a raft of 10 premium and A-grade rated commercial blocks both in Auckland and Wellington.

The Thiel family’s New Zealand portfolio and wider business interests are exclusively managed by Bayleys. Last month Bayleys Real Estate principal David Bayley and Bayleys Property Services general manager Stuart Bent spent three days with Rosalia AG managing director Wolfgang Thiel reviewing the company’s Kiwi portfolio and identifying expansion activities with a view to acquiring more properties.

Wolfgang Thiel said that since first entering the New Zealand commercial property market in the early 2000s, the family had always taken a long-term view of its Auckland and Wellington holdings – opting for the reassurance of balanced rental returns and steady capital growth over the more roller coaster peaks-and-troughs of bigger cities around the globe.

“The family’s business model is based on purchasing premium and A-grade stock – which in turn attracts and secures long-term tenants - in good CBD and CBD-fringe locations,” Mr Bayley said.

“In New Zealand, the Thiel’s have a propensity for owning properties with tertiary education providers as tenants – such as Auckland University of Technology, Massey University, and the Media Design School.”

David Bayley said that up until recently, the Thiel’s were comfortable with its current New Zealand holdings. However, the steady decline in the global value of the Kiwi dollar throughout 2015 had consequently made buying more New Zealand property a more financially attractive option.

“The New Zealand dollar was tracking around the mid-80 cents mark at the beginning of the year. It’s now hovering around the mid-60 cents range. That 30 percent or so revaluation has made our real estate stock more attractive – especially for companies taking a long-term view of their investment portfolio.

“However, the Thiel’s are in the same situation as a number of offshore-based investors Bayleys are currently working with – in that there’s very little stock in the $10 million-plus bracket either on the market or coming onto the market.”

Mr Bayley said offshore investors seeking buildings in the $10 million-plus category, were going head-to-head with New Zealand corporate investors.

“The NZX-listed property companies and larger private investor/developers are all circling, but there’s very little, if anything, out there in CBD Auckland and Wellington at the top end,” he said.

“Much of the new-build stock in Auckland – such as Fonterra’s new headquarters in Fanshawe Street and Auckland University’s new Newmarket campus – is all being constructed as ‘holding property’ rather than for immediate sale.

Under its contract with the Thiel family, Bayleys Property Services manages the portfolio’s building maintenance and works programmes, tenancy and lease negotiations, and new tenancy placements.

“Their portfolio is one of the biggest privately-owned property holdings in New Zealand. It’s a reflection of the trust which Wolfgang Thiel has with Bayleys Property Services that a portfolio of this magnitude can be managed remotely from the other side of the world,” said David Bayley.

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