News } Tabak

Business Sales Update – May 2015

Even though the colder weather is starting to set in – it is hard to forget the unbelievably good round of weather we’ve experienced in New Zealand since the start of the year.

Even though the colder weather is starting to set in – it is hard to forget the unbelievably good round of weather we’ve experienced in New Zealand since the start of the year. Even cyclone Pam lost strength before it hit here and kept respectfully East enough to really only affect the East coast up North and around Gisborne and Hawkes Bay.

Well that’s not the only good news - certainly if you’re an owner of a house or a business.

Property Market Remains Strong

The residential property market is a key indicator of confidence in the economy and house prices continue to be strong. Articles in interest.co.nz show there is more caution in Auckland - as the price increases there have been quite phenomenal - but prices are “catching up” elsewhere.

And it’s not just the residential property market. New Zealand's biggest private property developer, Mansons TCLM, is planning three big new Auckland office blocks worth $220 million.

An article in the Herald  reported Culum Manson saying demand for new low-rise green-star rated office blocks with vast floor plates was so strong that the business would put up the buildings around the fringe of the CBD. The work could revitalise areas of the city, particularly around the City Works Depot, Parnell's warehouses and perhaps Mills Lane in the CBD where Mansons will redevelop the NZME site between Albert St and Wyndham St.

New “Norm” for Business

The rise in house prices gives owners more equity for no effort and more collateral security when borrowing for business – be it for expansion or acquisition. And at TBK Capital we’re getting more requests to arrange loan finance for both property and business.

At Tabak Business Sales, we’re seeing more confidence in the economy - and in business as results continued to improve through 2014 into this calendar year. There will be many smiling faces in the next month or so as SMEs prepare their 31 March financial year’s accounts.

We see the last two years of growth setting a new “norm” and results this will give business owners more confidence about offering there businesses for sale.

From Rock Star to Goldilocks Economy

As further evidence of the strong economy I was pleased to read a recent article by Stephen Lowe and Joshua Pringle of Chapman Tripp in which they have the view that the current “Goldilocks” economy is just right for our capital markets.

Their pick is “for the IPO pipeline to keep pumping this year, particularly in the mid-market, and for increased M&A action.  The current strength of both the M&A and equity markets means dual-track processes could also feature, where an IPO and a trade or private equity sale are pursued simultaneously.”

They also see this year - being the first full year of implementation for the Financial Markets Conduct Act coming into effect – resulting in fundamental changes to many different types of equity capital market transactions including IPOs. This is an excellent article and well worth reading.

 

Kind Regards,

 

 

Alex Smith BBS, BA (Hons)

Partner - Tabak Business Sales

Licensed under REAA 2008

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