SINGAPORE (EDGEPROP) – Banking on a proposed legislative change which will exempt Singaporeans from a ban which will prohibit buyers from outside Oceania region from buying New Zealand homes, Knight Frank has entered into a strategic partnership with Bayleys Realty Group Limited to better access the New Zealand homes market.
Knight Frank was established in London 123 years ago. Today, the firm is the largest privately-owned international property consultancy in the world. Barleys is New Zealand’s largest full-service real estate agency. As part of the arrangement, Bayleys has acquired the Knight Frank operations in New Zealand. The new partnership will trade in New Zealand as Bayleys in association with Knight Frank.
The partnership comes at a time when foreigners face a ban on buying New Zealand homes after a spending splurge by millionaires seeking getaway homes crowded out local buyers and pushed up property prices.
Transactions of over NZ$20 million in value in commercial and industrial property in New Zealand amounted NZ$12.2 billion between 2014 to June 2018. Bayleys’ research shows that overseas investments contributed to 50 per cent of this total, and purchases by Singapore investors dominated this pie at 31%, followed by Canada (19%), US (14%), Hong Kong (13%) and Australia (12%).
In the first half of 2018, foreign real estate investors have already committed over NZ$1.4 billion to the commercial property market in New Zealand.
Knight Frank regional head, Kevin Coppel, says, “Asian buyer activity in Oceania has been significant over the last few years, with New Zealand being one of the preferred targets. The relative returns from New Zealand property is a strong attraction to offshore investors. According to MSCI, the average annual return generated by commercial and industrial property across New Zealand have been 10.5% over the year to March 2018, which is higher than those prevailing in many other mature markets.
“Also, with a higher pursuit towards lifestyle living, we are seeing rising interest in waterfront and recreational homes which New Zealand is well-known for. With the new partnership, not only do we have access to the best insights around the dynamics of the New Zealand market, but also world-class properties which would interest our international investors.
“Come October, we will be introducing new development projects from Auckland and Queenstown in New Zealand to Asia, starting from Singapore. If current legislation is passed, Singapore is potentially the only nation outside of Oceania that will have full rights to buy a New Zealand home. We expect interest from Singapore investors in New Zealand to remain robust in the year.”
“Gaining extensive exposure to international markets for our clients across the residential, rural and commercial property sectors is one of the most important elements in this partnership with Knight Frank which has a footprint in 60 markets worldwide. Similarly, international clients from the Knight Frank network looking to purchase or lease real estate assets in New Zealand would be drawn to Bayleys’ full suite of listings and services,” highlights Bayleys Corporation managing director, Mike Bayley.
Knight Frank Australia CEO, Stephen Ellis, added, “Today, the synergies between Australia and New Zealand are greater than ever, which presents us with a real opportunity to service investors and corporates on both sides of the Tasman. Together, Knight Frank and Bayleys will be one of the largest full-service real estate consultants across Australia and New Zealand.”
The staff from Knight Frank New Zealand have transitioned over to Bayleys. As a result, Bayleys property management services and advisory capabilities will be strengthened, particularly in Christchurch; while the valuations team has also more than doubled in size.
Bayleys Corporation national commercial and industrial director, Ryan Johnson, says there would now be an integration phase as both companies work towards becoming one entity in New Zealand. Central to this is the relocation and unification of the two companies’ commercial and industrial teams into new purpose-built premises in Christchurch.
Mr Bayley emphasises, “This transaction has catapulted Bayleys to the number one position as a full-service commercial and industrial real estate agency in Canterbury. The partnership continues to offer a seamless mix of services in the property management and valuations disciplines, as well as sales and leasing.
“The essence of the partnership is that Bayleys will continue its New Zealand legacy, retaining its homegrown Kiwi ownership, operations and best practices while enhancing its international presence through the relationship with Knight Frank’s global business. We look forward to working with new clients affiliated with Knight Frank operations around the world.”
Alistair Elliott, Knight Frank senior partner and group chairman, says, “Knight Frank seeks to expand its presence around the world through partnerships with the leading local players. The new relationship with Bayleys – the leader in the New Zealand market – is a clear demonstration of this approach as was our partnership established with Santos Knight Frank in the Philippines in 2017.”
Undoubtedly, the partnership between the two prominent real estate services companies opens up the immense opportunities for cross-border collaboration which will increasingly position them collectively as one of the market leaders for property seekers of New Zealand homes.
Mr Bayley says the private ownership structure of both Bayleys and Knight Frank will enable the two entities to evolve their entrepreneurial and innovative approach far more quickly in today’s rapidly changing markets than their internationally-owned and publicly-listed real estate agency competitors.
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