Looking South and West; NZ’s evolving investment compassMarch 7, 2019 / By
Keen South Island investment market watchers will undoubtedly have seen the headlines that Augusta’s Industrial Fund acquired Castle Rock Business Park in Christchurch for $53.75m in late 2018. A great result no doubt – and obviously incredibly encouraging for the market to see the South Island demonstrating its attractiveness to investors. To my mind though this wasn’t the most crucial deal of the year – that honour (in my opinion anyway) was reserved for the Government and their decision to invest $140m in the future of the West Coast.
The Government Provincial Growth Fund’s $140m investment into tourism, ultra-fast broadband and mobile coverage, mining and agriculture plays superbly well to the South Island’s inherent strengths. It will go a long way to help kick-start economic growth and foster property investment returns from a wide range of assets located right the way across our beautiful, dramatic and globally renowned West Coast.
To make the most of our West Coast opportunity we must play to our South Island economic strengths and target growth where it is achievable and, importantly, sustainable. Infrastructure, tourism support, economic connectivity and agriculture are all key parts of the West Coast investment case. It is therefore encouraging that Government recognise the importance of a multi-facetted approach to deliver results (although we do expect that the easiest win will be improved broadband and mobile connectivity given the times we live in).
It is an undisputed fact that the world is getting smaller – at least practically – and global and national connectivity is increasing day by day. Although there are still natural barriers to covering physical distance, electronic communications are rapid these days and super-fast broadband is essential. With instant messaging, Skype, Facetime, WhatsApp, WeChat, Instagram etc., people around New Zealand have never had the potential to be as close to one another through technology. This is opening business opportunities all across the country, and for the traditionally most remote parts of the country (the West Coast in particular), the potential for a seismic shift in ‘business as usual’ going forward is extraordinary.
And, to be fair, a growing number of the investment community already realise it. Although not necessarily hitting the national headlines like deals in other areas of New Zealand, the West Coast represented an active and growing investment market in the second half of 2018. Our multi-million NZD sales of the Recreation Hotel in Greymouth, Lillydale Station in Farlie (4,046 hectares) and strong interest in two retail shops in Hokitika demonstrated the art of the possible for owners and investors alike.
Looking forward to 2019 we fully expect to see the investment community continue to see and seize opportunities for West Coast investment. Equally we know that there are also a growing number of West Coast owners who have achieved their practical property owning goals in recent years but don’t have the resources to hand to make substantial upgrades. These owners are now looking to capitalise on growing positivity into market sentiment and offer development specialists the opportunity to reinvigorate assets with substantial potential. 2019 will be the year of adding value; bring it on!