Softer retail drags down property returns
A decline in returns from retail property investments has lowered overall returns as measured by the Property Council/IPD All Property Index.
The results for the year ending December 2012 show a total return of 8.8% comprised of 8.1% income (rents) and a positive 0.6% capital growth (property values).
This compares to the previous September 2012 year total return of 9.4%.
The different sector returns for retail shopping centres, office buildings and industrial property were 10.5%, 7.5%, and 10.9%, respectively.
In the September year the figures were 13.1%, 7.2% and 10.3%, respectively.
The lower investment returns reflected generally soft market conditions for employment growth, retail trade and house approvals.
Property Council chief executive Connal Townsend says he expects high growth areas like Auckland to lead the charge in 2013.
And when the Christchurch rebuild kicks in it should also positively affect returns.
The long-term total average return in the years leading up 2008 was 10%.
A more detailed analysis will be provided in NBR NZ Property Investor on Monday.