NZ property showing “all the right signs” of better year ahead – Argosy’s Mence

26th March 2025 By Paul Yandall | paul@propertyticker.co.nz | @propertyticker

New Zealand’s property market is showing “all the right signs” for a better year, says Argosy chief executive Peter Mence.

In an investor update released today, the NZX-listed property company said it was seeing good lease interest for its industrial and office space.

“On the occupancy front, we had expected that lease enquiry would improve in the first part of the new year, but it has certainly exceeded our expectations,” Mence said.

“Enquiry of course does not equal new leases, but naturally we will not achieve new leases without enquiry. And new leases are being achieved!”

Mence cited Argosy’s new $100m sustainable industrial building at 224 Neilson Street in Auckland, which Basick Transport has signed on for, and “great progress” made leasing its 105 and 101 Carlton Gore Rd office properties.

“We have only 500sqm still to commit in each building and both are under negotiation.”

Mence noted that “enquiry levels for new leases in the commercial office sector and in the industrial sector are strong and that is a very positive factor”.

“As the economy begins to show life, well located bulk retail centres are expected to show good rental growth and we certainly have a very positive expectation from the Albany Mega Centre which represents the majority of Argosy’s large format retail exposure.”

Falls in the Official Cash Rate have also helped reduce the cost of funding, “having a positive influence on capital values with the beginnings of asset value growth evident in recent transactions and valuations”.

“So in summary, we know that the economy is challenged and we are obviously aware that many are struggling to make the proverbial ends meet, but the property market is showing all the right signs for a brighter year ahead both value and in occupancy,” Mence said.

He added that Argosy would continue to increase its weighting to industrial property in the greater Auckland area, and enhance the quality of its portfolio.

The company has 50 properties, housing 159 tenants, in a portfolio valued at $2bn, with a weighted average lease term of 5 years and occupancy of 96.2%.

It also announced today that it had settled the sale of 8 Forge Way in Panmure, Auckland, for $35.2m.

The sale to an undisclosed buyer was announced in April last year, with the asset not considered core, and the sale price reflecting a premium of 1.1% above its book value, as at its September 2023 valuation.

Argosy’s March 2025 investor update can be read here.