New Zealander Looks for U. S. Investments

A New Zealand real estate investor says that Los Angeles is showing steady but not dazzling growth.

David J. Davies, co-founder and managing director of publicly owned Commercial Securities Ltd., Manukau City, New Zealand, says some Pacific Rim markets, including Australia, New Zealand and Hong Kong are moving faster.

“In Australia and New Zealand,” Davies says, “higher inflation rates have assisted this growth, whereas in Hong Kong, growth has not been fueled by inflation.”

His firm entered the U.S. real estate market in December, 1986, because of a change in New Zealand law making foreign investments easier.

The New Zealand dollar has not shown strong appreciation against the U.S. dollar as has been the case with the Japanese yen. This appreciation is a factor leading Japanese to invest in the United States, he says.

However, in the long term, Davies says, the New Zealand dollar may weaken, and this has encouraged New Zealand investors to look toward the United States.

With its U.S. headquarters in Portland, Ore., Commercial Securities owns and manages about $67 million (U. S.) in American real estate, about half of it in Portland.

The firm’s only Southern California property is the Compact Video Center building, 2901 Alameda Ave., Burbank, across from NBC television studios. The building was purchased last December for $20 million.

The remaining $15 million in investments are in Honolulu and San Francisco. Davies says his firm is looking to buy and then manage commercial office and retail properties in Southern California for up to about $40 million each.

What he doesn’t want are strip shopping centers.

Another thing he doesn’t want is to try to compete with Japanese investors for the kind of trophy properties they now prefer.

However, he expects Japanese investors to seek out high-quality, smaller properties and residential developments.

“This is what is happening now in Honolulu,” he says.