Unlocking Wealth: Why Commercial Property Investment Outshines Bonds and Term Deposits

November 2023

MMG3 Moorhouse Ave Exterior View small copy
When it comes to wealth management and financial planning in New Zealand, investors have traditionally leaned on safe, low-risk options like bonds and term deposits, with a lesser group opting for riskier investments in the hope of greater gains. With the current economic headwinds, bonds and term deposits are once again the favourite “dependable” option for investors. However, as the economic tables turn, savvy investors will increasingly be turning their attention to commercial property investment.

In this opinion piece, Omea Willows, Director, Investor Relations and Operations, explores why commercial property investment offers distinct advantages over bonds and term deposits in New Zealand.

Inflation Hedge

Inflation erodes the purchasing power of fixed-income investments like bonds and term deposits. In contrast, commercial property investments often serve as an effective hedge against inflation. As the value of property and rental income tend to increase with inflation, real estate investments can help maintain or even grow your wealth in the face of rising prices.

Capital Appreciation

Commercial properties in New Zealand have a history of appreciating in value over time. While bonds and term deposits offer a fixed return, the value of commercial properties can increase significantly over the years, giving the potential for capital appreciation. If you have the ability to acquire a commercial property outright yourself, this also provides opportunities for strategic financial planning, such as leveraging your property for additional investments.

Diversification Benefits

Diversification is a fundamental principle of sound investment strategy. By incorporating commercial property investments into your portfolio, you can achieve a higher level of diversification than a bond or term deposit-heavy strategy. This diversification can help mitigate risk and reduce the impact of market fluctuations on your overall wealth.

Active Involvement

Commercial property investments offer a level of active involvement and control that bonds and term deposits do not. Investors can influence the performance of their properties through management decisions, renovations, and tenant selection. This level of control can lead to enhanced returns and the ability to adapt to changing market conditions

Mackersy Property has the ability to provide active management to investors with a dedicated asset management team that includes Asset Managers, Property Managers and Facilities Managers. They constantly monitor rent reviews and renewals to ensure the syndicate achieves the best market rent review or renewed lease possible. If the tenant is leaving, they will liaise with an agent to ensure we get a long lease term in place to create value, as well as the best possible rent.

While bonds and term deposits are currently considered safe and reliable investment options, they may not provide the best path to wealth accumulation and financial security. Commercial property investment offers a compelling alternative, with its potential for steady income, inflation protection, capital appreciation, diversification benefits and active management increasing its value.

For those looking to unlock the full potential of their investments, it's time to consider commercial property as a powerful tool in the New Zealand financial landscape. Mackersy Property offers a variety of commercial property investment options with the ability for an investor to choose their level of investment in one offer or across various offers. Each property is managed by a team of Asset, Property and Facilities Managers whose focus is ensuring the strategic and operational success of the property and tenant.

As with any investment, thorough research and professional guidance are essential, but the rewards can be well worth the effort.

For more information on Mackersy Property offers, click here, or to speak to someone about what investment opportunities you could consider, please email invest@mackersyproperty.co.nz or phone 03 450 9540 to speak to the Investor Relations Team.