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Bayleys and Knight Frank partner in New Zealand

Knight Frank, the independent global property consultancy, has announced a partnership with Bayleys Realty Group Limited. Together, Knight Frank and Bayleys will be one of the largest full-service real estate consultants across Australia and New Zealand. The strategic partnership will see the company trade as Bayleys in association with Knight Frank.

The move will see multiple synergies for both firms, with Bayleys leveraging this opportunity to gain international exposure through Knight Frank’s global network, and Knight Frank looking to maximise Bayleys’ reach in New Zealand in addition to their own.

Transactions of over NZ$20 million in value in commercial and industrial property in New Zealand amounted to NZ$12.2 billion between 2014 and 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 per cent, followed by Canada (19 per cent), US (14 per cent), Hong Kong (13 per cent) and Australia (12 per cent).

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.

According to Knight Frank Australia’s CEO Stephen Ellis, “There are obvious strong similarities between Knight Frank and Bayleys. Each company is privately owned, with a long history in dealing with institutional and private clients across commercial and residential real estate in the region. Today, the synergies between Australia and New Zealand are greater than ever before, which presents us with a real opportunity to service investors and corporates on both sides of the Tasman.

“Furthermore, there are many people at Knight Frank Australia and Bayleys who know one another very well, having worked together before, which will make it easy to connect the two businesses.”

Knight Frank New Zealand’s staff 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.

Knight Frank’s regional head, Kevin Coppel, said, “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 has been 10.5 per cent 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.”

Knight Frank’s latest report, Active Capital, has found that the global real estate market continues to become more international, with cross-border capital increasingly influential. In 2017, 32 per cent of all transactions globally by volume involved cross-border purchasers, up from 25 per cent during 2009-2011.

The Asia-Pacific region, including Australia and New Zealand, has been a key driver of this internationalisation, and rapid economic growth means that it is carrying ever-greater weight in global real estate markets. 2017 marked the first time that Asia-Pacific has overtaken Europe and North America as the top source of global cross-border capital outflows.

Bayleys Corporation Managing Director Mike Bayley said, “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.”

Bayleys Corporation national commercial and industrial director, Ryan Johnson, said 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 a new purpose-built premises in Christchurch.

“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,” said Mr Bayley.

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