Got Stock? Market Indicators Report | 2016 - NEW ZEALAND INDUSTRIAL - True Commercial
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Market Indicators Report | 2016 NEW ZEALAND INDUSTRIAL Got Stock?
"Economic growth continues
to support the expansion of
the industrial sector."
Contents Key Nationwide Trends 1 Introduction 3 Key Findings 3 Industrial Market Indicators 4 Auckland 5 Wellington 7 Christchurch 9 Regional Centres 11 Industrial Leasing Activity 13 Industrial Sales Activity 15 Infrastructure Updates 17 Industrial Developments 19 Outlook 20 colliers.co.nz/Find-Research Join our LinkedIn group: Colliers International New Zealand Network
IN BRIEF
KEY HAMILTON OVERALL
N AT I O N W I D E $81/m² Average Warehouse Net Rent
TRENDS
$129/m² Average Office Net Rent
7.8% Average Yield
297 ha Waikato Industrial Zoned Vacant Land
OVER THE NEXT Demand:
Outlook: Demand:
12 MONTHS
Supply:
Supply:
CHRISTCHURCH OVERALL
2.1% Vacancy Rate
$90/m² Average Warehouse Net Rent
$170/m² Average Office Net Rent
Economic growth continues to
8% Average Yield
support the expansion of the
industrial sector. As tenant
559 ha Canterbury Industrial Zoned Vacant Land
demand intensifies, vacancy $285/m² Average Land Value
rates will reduce further.
Outlook: Demand:
Supply:
Pace of construction activity is
not sufficient to keep up with
demand in Auckland.
Wellington’s pace of absorption
may slow over the next 12
months due to reducing supply
rather than decreasing demand.
Christchurch’s market is likely
to enter a period of change
as demand pressures reduce
fractionally after a continued
period of significant demand.
1
AUCKL AND OVERALL
2.2% Vacancy Rate
$103/m² Average Warehouse Net Rent
$196/m² Average Office Net Rent
6.8% Average Yield
790 ha Auckland Industrial Zoned Vacant Land
$405/m² Average Land Value TAURANGA/
MT MAUNGANUI OVERALL
Outlook: Demand:
Supply: $89/m² Average Warehouse Net Rent
$133/m² Average Office Net Rent
6.7% Average Yield
303 ha BOP Industrial Zoned Vacant Land
Outlook: Demand:
Supply:
Hamilton’s recent boost in leasing
activity reduced vacancy rates and kept
WELLINGTON OVERALL the pressure on investors.
3.6% Vacancy
Vacancy
RateRate
$99/m² Average Industrial Gross Rent
$130/m² Average Office Gross Rent
8.6% Average Yield
Limited leasing availability in
133 ha Wellington Industrial Zoned Vacant Land
Tauranga’s industrial market
$392/m² Average Land Value
continues to keep market
conditions tight.
Outlook: Demand:
Supply:
Tenants and investors are
focused on quality, lower
DUNEDIN OVERALL maintenance costs and space
efficiency in Dunedin.
$68/m² Average Warehouse Net Rent
$113/m² Average Office Net Rent
8.6% Average Yield
48 ha Otago Industrial Zoned Vacant Land Interest rates remain low, encouraging
private investors, syndicators, unlisted
and listed property vehicles to remain
Outlook: Demand:
active in the most traded commercial
Supply: property sector in New Zealand.
2
Introduction
Constraints within the industrial sector are impacting on tenants >> Interest rates remain low, encouraging private investors, syndicators,
and purchasers. Tenants searching for new or larger prime space are unlisted and listed property vehicles to remain active in the most
struggling to find suitable premises to work from while purchasers traded commercial property sector in New Zealand. A shortage
are struggling to find good stock to buy. This is leading to further of stock and high levels of competition in the hotspots of recent
decreases in vacancy, increases in rents and yields firming to new years have boosted activity for the likes of Wellington, Hamilton
record lows. and Dunedin which have not experienced the same levels of yield
appreciation in recent years.
Developers have upped the ante, but they too are experiencing
constraints in terms of land availability, pricing and suitable
infrastructure, as well as increasing material and labour costs.
The current outlook suggests more of the same for the next 12 Overall Vacancy Rates - Three Main Centres
months. Little relief is forecast for new entrants who won’t meet
the market’s new pricing levels. 6%
5.4%
5%
Overall Vacancy Rate
4% 3.6%
Key Findings
3.1%
3% 2.6%
2.2% 2.1%
2%
>>Economic growth continues to support the expansion of the 1%
industrial sector. Businesses are optimistic in future orders, 0%
production, output and are also realistic in their employment Auckland Auckland Christchurch Christchurch Wellington Wellington
Feb 15 Feb 16 Sep 14 Sep 15 Nov 14 Nov 15
intentions. Whereas tenant demand intensifies, vacancy rates
will reduce further. Source: Colliers International Research
>>In the main centres, capacity may become an issue as the pace
of construction activity is not sufficient to keep up with demand,
particularly in Auckland. This will keep rents rising steadily, but
likely below 3% p.a. 2015 New Zealand Property Sales
>>Wellington’s pace of absorption may slow over the next 12 months
due to reducing supply rather than decreasing demand. Tenants 100%
are finding it increasingly difficult to locate suitable space to lease. 90%
80% 99
Consequently, rents will rise – possibly at higher rates than in the
Proportion of Sales
2033 215
70%
past 12 months.
60%
>> Christchurch’s market is likely to enter a period of change as demand 50% 60
pressures reduce fractionally after a continued period of significant 40%
1084 95
demand. New rents are likely to remain broadly in line with current 30%
57
20%
rates, albeit around 10% above pre-earthquake rates. 536 53
10%
36
>>Hamilton’s recent boost to leasing activity reduced vacancy rates 0%
411 45
and kept the pressure on investors when bidding for prime space. $Limited leasing availability in Tauranga’s industrial market
continues to keep market conditions tight. Tauriko is a hotspot of
activity, signalling that well-serviced land supply is a key factor to
alleviate demand pressures, especially for the continuation of the New Zealand Vacant Industrial Land Supply
building sector and ports and logistics sector. Investor appetite
remains high, with 5% yields a more common occurrence. 900
Vacant Industrial Land (ha)
800
>>The gap between prime and secondary property performance 700
in Dunedin continues to increase. Tenants and investors are 600
focused on quality, lower maintenance costs and space efficiency. 500
400
Several strongly performing local and national businesses are
300
undertaking major industrial development projects. Competition 200
from purchasers remains strong supported by attractive debt 100
costs to yield gaps. 0
Auckland Bay of Plenty Canterbury Otago Waikato Wellington
Region Region Region Region Region Region
Nov 14 Nov 15
Source: Colliers International Research
3
New Zealand Industrial Market Indicators Q1 2016
Secondary
Vacancy Prime Capital Secondary
Net Prime Rents Net Secondary Rents Capital Prime Market
Precinct Rate Value Market Yields
($/m²)*** ($/m²)*** Value* Yields (%)**
(%) ($/m²)* (%)**
($/m²)
OVERALL OFFICE WAREHOUSE OFFICE WAREHOUSE
AUCKLAND Feb-16 LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH
Airport Corridor 1.1% 210 230 107 120 150 190 75 90 1,825 2,365 1,090 1,570 6.00% 7.00% 7.00% 8.25%
East Tamaki 1.2% 210 240 110 125 150 190 85 95 1,925 2,465 1,225 1,690 6.00% 6.75% 6.75% 8.00%
Manukau/Wiri 2.6% 210 230 105 120 140 180 80 90 1,865 2,470 1,150 1,600 5.75% 6.75% 6.75% 8.00%
Mt Wellington 2.3% 210 245 110 125 150 190 85 100 1,925 2,710 1,225 1,750 5.50% 6.75% 6.75% 8.00%
Penrose/Onehunga 0.1% 210 235 110 125 150 190 85 100 1,925 2,675 1,225 1,750 5.50% 6.75% 6.75% 8.00%
Rosebank/Avondale 5.2% 200 235 105 120 130 170 75 95 1,835 2,385 1,075 1,630 6.00% 6.75% 6.75% 8.00%
New Lynn 1.3% 190 230 105 120 160 190 75 90 1,660 2,185 1,150 1,570 6.50% 7.35% 7.00% 8.00%
Henderson 1.1% 190 230 105 120 160 190 75 90 1,660 2,185 1,150 1,570 6.50% 7.35% 7.00% 8.00%
Mairangi Bay 2.1% 210 265 110 125 180 210 105 110 2,000 2,780 1,715 2,165 5.50% 6.50% 6.00% 7.00%
North Harbour 1.1% 200 250 105 125 170 200 105 110 1,910 2,855 1,685 2,135 5.25% 6.50% 6.00% 7.00%
Wairau Valley 1.7% 180 230 100 115 140 200 100 105 1,785 2,630 1,470 2,065 5.25% 6.50% 6.00% 7.35%
WELLINGTON Nov-15
Seaview 4.1% 145 175 110 135 90 120 65 95 1,090 1,515 150 235 7.25% 8.25% 8.50% 10.00%
Grenada 0.2% 135 170 105 130 100 130 85 100 1,060 1,485 155 235 7.25% 8.25% 8.50% 9.75%
Miramar/Rongotai 0.6% 125 150 95 115 100 120 75 90 805 1,130 200 280 7.75% 9.00% 9.00% 10.00%
Ngauranga 4.4% 150 185 120 145 115 155 90 115 1,190 1,705 210 315 6.75% 8.00% 8.00% 9.50%
Petone/Alicetown 4.5% 140 170 110 135 125 155 95 115 1,095 1,555 205 315 6.75% 7.75% 8.00% 9.75%
Porirua 4.2% 130 150 105 120 95 115 70 85 1,065 1,355 150 250 7.00% 8.00% 8.00% 10.00%
Naenae/Wingate 3.4% 125 160 95 120 85 100 55 80 855 1,225 145 230 7.75% 8.75% 8.75% 10.25%
Upper Hutt 3.4% 115 140 85 105 80 100 55 75 675 1,030 120 190 8.00% 9.25% 9.25% 10.50%
CHRISTCHURCH Sep-15
Hornby/Islington 1.1% 170 230 90 120 135 175 70 90 1,415 2,185 950 1,380 6.00% 7.00% 7.50% 8.50%
Middleton/Sockburn 2.0% 170 230 90 120 135 175 70 90 1,415 2,185 950 1,380 6.00% 7.00% 7.50% 8.50%
Sydenham 3.6% 170 250 90 125 135 175 70 95 1,415 2,310 950 1,430 6.50% 7.50% 7.75% 8.75%
Riccarton/Addington - 170 250 90 125 135 175 70 95 1,415 2,310 950 1,430 6.50% 7.50% 7.75% 8.75%
Bromley - 140 170 75 95 95 125 50 70 880 1,420 470 925 7.75% 10.00% 8.75% 12.50%
Woolston - 170 220 90 120 125 165 65 85 1,370 2,075 855 1,265 7.25% 8.25% 8.50% 9.50%
HAMILTON
Hamilton - 130 170 75 120 90 125 55 75 1,110 2,000 690 1,065 6.50% 7.75% 8.00% 9.00%
TAURANGA
Tauranga/Mount Maunganui - 145 165 95 110 100 120 70 80 1,615 2,200 950 1,305 5.50% 6.50% 6.75% 8.00%
DUNEDIN
Inner City - 130 220 75 125 70 100 45 75 1,075 2,135 500 1,000 6.75% 8.00% 8.00% 10.00%
Kaikorai Valley - 100 180 60 95 60 100 40 60 775 1,545 420 775 7.25% 8.75% 8.75% 10.50%
Mosgiel - 90 150 55 90 60 90 40 55 710 1,405 420 710 7.25% 8.75% 8.75% 10.50%
Source: Colliers International Research
Assuming 2,000m² building with 50% site coverage
*Based on net combined rents of warehouse and office rents (assumes warehouse/office ratio of 80/20) and assuming fully leased at market rates
**Assumes freehold where appropriate
*** Wellington based on gross rents
Note: figures are rounded
4
Auckland Industrial Vacancy by Precinct
4%
Auckland
3% Demand Outpacing Supply
Vacancy Rate
2% Auckland’s industrial vacancy remained at a record low 2.2% in
the latest Colliers International survey. Prime vacancy edged up
1% fractionally to 1.7% while secondary vacancy reduced to 2.4% over
the past year. The rise in prime space reflected the increase in stock,
0%
which had some leasing capacity, but not much considering there
Airport Corridor
Mairangi Bay
North Harbour
Wairau Valley
Overall
Onehunga/Penrose
Rosebank/Avondale
Mt Wellington
Manukau/Wiri
East Tamaki
New Lynn
Henderson
was 169,000 sqm of space constructed over the past year.
Overall net absorption in Auckland’s industrial sector, which takes
into consideration supply and vacancy changes, reached 180,000
sqm over the past year. Although this is lower than the 235,000 sqm
Feb 15 Feb 16 reached in February 2015, it signals a lack of space to lease rather
than a lack of demand.
Source: Colliers International Research
Industrial sector occupier demand is growing from the land-
extensive users of transport and storage as well as the variety of
needs in the construction sector. The manufacturing sector is still
the major GDP contributor of the sector and has found a natural
Industrial Investor Confidence Survey - Three Main Centres base line after the incremental decreases in business numbers and
employment between 2005 and 2009.
80%
60%
The relentless occupier demand that Auckland is experiencing
will keep developers in pursuit of locating suitable land to develop
40%
for tenants and owner-occupiers. However, constraints on finding
Net Percent
20%
suitably zoned land remain. The latest Colliers International Vacant
0%
Industrial Land survey shows that net absorption increased to one
Mar 09
Sep 09
Mar 10
Sep 10
Mar 11
Sep 11
Mar 12
Sep 12
Mar 13
Sep 13
Mar 14
Sep 14
Mar 15
Sep 15
Mar 16
-20%
of its highest rates since 2008, approximately 76 ha. This leaves
-40%
approximately 790 ha of zoned vacant industrial land, of which
-60%
approximately half is in the south of Auckland and almost 20% is
-80% owned by Auckland International Airport. The limited land supply
Auckland Wellington Christchurch is forcing values up in the most popular established areas in the
south, now reaching mid $400/sqm.
Source: Colliers International Research
Rents and Yields Sharpen Further
Capacity pressures in Auckland may become an issue as the pace
127-131 Pilkington Road of construction activity is not sufficient to keep up with demand.
Glen Innes, Auckland
This will keep rents rising steadily, but likely sub-3% p.a. due to the
existing number of rental agreements linked to the Consumer Price
Index (CPI).
These moderate rental increases in a high occupier demand
environment is not deterring investors from heightened levels of
purchasing activity. Low interest rates in a growing economy are
keeping purchasers competitive at auctions and negotiations. Vacant
stock above $5 million will reach mid-6% with well covenanted prime
stock reaching low 5%. Investors, owner-occupiers and syndicators
are all rummaging through any opportunities that become available.
This will keep the pressure on yields to keep reaching new lows.
The focus on capital appreciation will keep already active investors
trading, but may limit the number of new entrants until more stock
Goodman (NZ) Limited have purchased a 5.8 hectare industrial
site at 127-131 Pilkington Road in Glen Innes for $30.3 million. becomes available.
The warehouse and showroom spaces cover a total area of 20,400
sqm. Under the PAUP, the site is designated for high density
redevelopment and mixed use zoning which includes residential
with a height limit of 16.5m.
5
North Harbour Mairangi Bay
$438 5.9% $475 6.0%
$115 0.6% 18 $118 2.9%
KEY
SOU
TH
Industrial Areas
ER
Y
N
W
M Major Roads
MW
O UR
Wairau Valley
Y
RB Railway Line
HA $450 5.9%
ER Average Prime Land
Values ($/m2)
P
$108 1.7%*
UP
Average Prime
Investment Yields (%)
Average Prime Warehouse
N O RT H
Rents ($/m2)
Auckland CBD Prime Vacancy Rates (%)
ES
W
TE
RN Rosebank/Avondale
MW
Y $375 6.4% Trend: Mar 15 - Mar 16
$113 5.2% 0%/$0 Actual: Mar 16 Figure
16
Henderson Penrose/Onehunga
Rosebank Road Interchange
$375 6.9% $400 6.1%
$113 0.7% $118 0.1% Mt Wellington
SO
UT
H $425 6.1%
WE
ST
ER $118 0.3%
N
MW
Y
New Lynn
$375 6.9% East Tamaki
$113 2.6%* $413 6.4%
$118 1.1%
Highbrook Drive Interchange
Airport Corridor/
Mangere Manukau/Wiri
$400 6.5%
20 $365 6.3%
* Overall Vacancy $114 1.8% $113 3.6%
Auckland Industrial Market Review
2016 compared to 2015
Occupier Demand Rentals Investor Demand
Enquiry = Average prime grade = Record levels = demand, prices
Business confidence = Warehouse $114/m2 Access to funding = sustained demand
Office $220/m2 Buyer groups = private, institutions,
Supply = Demand =
Incentives = 2 weeks/year of syndicators
Vacancy term
Land Supply
Prime grade = 1.7% (Feb 2016)
Investment Sales Enquiry =
Secondary grade = 2.4% (Feb 2016)
Available land for sale =
Average prime yields = 6.4%
Spec build activity = Value pressure =
Average secondary yields = 7.3%
6
Wellington
Wellington Industrial Vacancy by Precinct
12%
Space Shortage? 10%
Vacancy Rate
8%
Demand for industrial space in Wellington pushed the vacancy
rate to a record low 3.6% with less than 100,000 sqm of space now 6%
available. This is well below the 9.0% reached in late 2012. The
4%
majority of the reduction was due to stronger tenant demand
and practically no new supply. More than 70,000 sqm of vacant 2%
industrial space has been absorbed in the past two years. The
0%
latest Performance of Manufacturing Index (PMI) points to
Miramar
Overall
Seaview
Petone/Alicetown
Grenada North
Naenae/Wingate
Ngauranga
Porirua
Upper Hutt
Kilbirnie/Rongotai
further growth in the sector along with employment numbers
encouraging further positive absorption in space over 2016.
Exacerbating the supply shortage in the future is the growing
trend of conversions of industrial space to bulky goods. Recent
examples include NZ Post’s mail sorting centre to a Bunnings, Nov 14 Nov 15
the former Colgate Palmolive factory into a Briscoes and Rebel
Sport (demolition complete) and the former Feltex factory into a Source: Colliers International Research
Kmart (resource consent issued). We are aware of other national
operators looking for more conversion opportunities. Flood
protection improvement plans for the Hutt River Stopbank in
Lower Hutt and the $270 million Petone to Grenada link road 9-15 John Seddon Dr
Elsdon, Porirua
estimated to start in 2019 will also reduce the total stock to make
way for the major projects.
The latest Colliers International Vacant Industrial Land supply
survey shows further traction in land absorption last year in the
Wellington region (including the Wairarapa). Approximately 20 ha
of land was absorbed, up from approximately 13 ha last year.
Rising Cash Flow and Values
Industrial property rents in the capital city have been rising steadily
over the past year. Rents have increased by approximately $5/sqm
to $10/sqm across most precincts. This has seen Wellington moving
firmly away from the flat rental rates that provided some of the most
affordable rates out of the main centres in New Zealand. Rent rises Rockport Holdings sold their former Mitsubishi Motors Vehicle
will continue as demand, supported by confidence in the business Assembly Plant for $33 million to MAAT Group, returning an 8.86%
environment, continues to outweigh supply. yield. The 52,180 sqm building is occupied by a range of tenants such
as Mitsubishi, Hannahs, Downer and Placemakers. The property’s
The change in optimism was most recently noted in the latest WALT as of sale was circa 6.1 years.
Colliers International Investor Confidence survey. In the March
2016 quarter, investors were a net positive 25% (optimists minus
pessimists) in their expectations on rising rents, decreasing
vacancy and higher returns. This is the highest rate since the survey 39-49 Randwick Rd
began in late 2008. Capital appreciation is one of the key ingredients Seaview, Lower Hutt
to this recent bout of confidence. Continued economic support for
occupiers and low interest rates to augment returns, bodes well for
Wellington’s investment sector for the medium term.
The next 12 months will see a continuation of the steady purchasing
demand from owner-occupiers moving to larger and higher quality
premises especially for properties $2 million or less. A recent
example includes Metco moving from Wingate to Seaview. Investors
are back in greater numbers for properties valued $2 million or
more, but the lack of new and high quality properties to purchase
is inhibiting yields from firming at faster rates. However, the recent
rises in rents and the growing confidence in the market is leading
to a tipping point that will likely see more brownfield development
occur than in recent years. This could lead to further investment
Argosy leased 3,710 sqm at 39-49 Randwick Road in Seaview,
and owner-occupier opportunities for a ‘starved’ investor market in Wellington to Precision on a six-year lease. The area comprises of
the near future. warehouse, showroom and a separate office building.
7KEY
Upper Hutt
Industrial Areas
$150 9.3%
Major Roads
$80 3.4%
Railway Line Porirua
Average Overall Land $225 8.3%
Values ($/m2) INDICATIVE TRANSMISSION
Average Overall $95 4.2% GULLY MOTORWAY
Investment Yields (%)
Average Overall 2
Grenada North
WY
Warehouse Rents* ($/m2)
A M
Overall Vacancy Rates (%) $263 8.4%
IRU
$105 0.2%
Trend: Mar 15 - Mar 16 Wingate/Naenae
POR
0%/$0 Actual: Mar 16 Figure $188 8.9%
LLE
1
$88 3.4%
NVI
Ngauranga
NSO
$575 8.1%
2 Petone/Alicetown
$118 4.4% JOH
$650 8.6%
$114 4.5%
Wellington CBD
Seaview/Gracefield
$313 8.5%
$101 4.1%
Kilbirnie/Rongotai
$775 8.9%
$94 1.0% Miramar
$775 8.9%
$94 0.0%
* Based on gross face rents
Wellington Industrial Market Review
2016 compared to 2015
Occupier Demand Investment Sales
Enquiry = Average prime yields = 7.9%
Business confidence = Average secondary yields = 9.2%
Supply = Demand =
Investor Demand
Vacancy
Record levels = demand, prices
Overall vacancy = 3.6% (Nov 2015) Buyer groups = private, institutions
New build activity =
Land Supply
Rentals
Enquiry =
Overall average*: Warehouse $99/m2 Available land for sale =
Office $130/m2 Value pressure =
8Christchurch
Christchurch Industrial Vacancy by Precinct
7%
6%
Transition Period Ahead
Vacancy Rate
5%
4%
3% Christchurch’s economy continues to outperform New Zealand’s,
2% reflecting the progress in earthquake rebuild activity. Colliers
1%
International’s latest vacancy survey is at 2.1% — down from 6.2%
0%
in 2012. However, there is a noticeable transition occurring with
Overall
Hornby/Islington
Middleton/Sockburn
Sydenham
more opportunities arising for tenants. The growth in supply and
fractionally lower expectations of sector expansion will ease tenant
pressure to locate to new premises over the short to medium-term.
The focus for tenants remains on leasing quality and new stock
in popular locations. This is apparent from recent activity like
Sep 14 Sep 15
Freightways, Fletchers Easy Steel, Hellaby Holdings Industrial
Source: Colliers International Research Group’s NZ Trucks and AB Equipment to name a few of the most
recent new builds either signed or in progress.
Glassworks Industry Park ‘Yield Hungry’ Investors Keep Rents Sharp
652 Halswell Junction Rd, Halswell, Christchurch
Similar to other locations nationally, there is a sizeable number of
investors and owner-occupiers looking to secure stock. The focus for
many investors is on tenanted stock given the transition the occupier
market is likely to experience over the short-term. Well covenanted
investment stock under will often reach low 6% yields, as investors
compete for returns in a low interest rate environment.
Despite rising construction costs, sharp yield expectations in the
current environment are keeping development activity profitable
and offsetting the need to significantly increase rents. New warehouse
rents are now just over $100-$115/sqm. New combined rents (ratio
of 80% warehouse and 20% office) are likely to remain broadly in
line with current rates over the next 12 months, albeit around 10%
above pre-earthquake rates.
Goodman sold their Glassworks Industry Park to Mainland Capital for
$38.9m in late 2015. The Glassworks Industry Park portfolio comprises
three buildings housing premium businesses MOVE Logistics, DHL,
Packaging House, Cirtex and Bridgestone. Total net lettable floor area
is nearly 30,000 sqm which is spread over 3.5 ha. All the buildings were
completed in 2014 and have a staggered lease expiry.
Progressive Distribution Centre
146 Shands Rd, Hornby South, Christchurch
Augusta Capital purchased Progressive distribution centre in Hornby
South for $39,525,000 million from Virgo Group. Augusta plans to
syndicate the property. The property is leased to General
Distributors, a subsidiary of Progressive Enterprises. The building is
situated on 71,811 sqm and underwent significant additions and
alterations in 2012.
9CHRISTCHURCH
INTERNATIONAL
AIRPORT 74
Bromley
Riccarton $150 8.9%
73 $363 7.0%
$85
$108
Hornby/Islington
Sydenham
$250 6.5%
$363 7.0%
$105 0%
$108 0%
73
Sockburn/Middleton
KEY $263 6.5% Portlink Industrial Park
Industrial Areas $105 0.9%
Major Roads Woolston/Hillsborough
Railway Line $205 7.8%
Average Prime Land $105
Values ($/m2) 75
Average Prime
Investment Yields (%)
Average Prime
Warehouse Rents ($/m2)
Prime Vacancy Rates (%)
Trend: Mar 15 - Mar 16
0%/$0 Actual: Mar 16 Figure
Christchurch Industrial Market Review
2016 compared to 2015
Occupier Demand Investment Sales
Enquiry = Average prime yields = 7.2%
Business confidence = Average secondary yields = 8.7%
Supply = Demand =
Investor Demand
Vacancy
Record levels = demand, prices
Prime grade = (Sep 2015)
Buyer groups = private, institutions, syndications
Secondary grade = (Sep 2015)
Spec build activity =
Land Supply
Rentals Enquiry =
Available land for sale =
Prime Grade: Warehouse $103/m2
Value pressure =
Office $195/m2
10Regional Centres Hamilton
In a market that has stock, occupier demand for larger ‘sheds’ have
been one of the stand-outs for Hamilton’s industrial sector over the
Tauranga past 12 to 18 months. This is assisting with bringing the vacancy rate
to lower levels given the floor sizes of the warehouses being leased.
Persistently low levels of availability remains the key challenge for
tenants searching for new space. The lack of options means many The majority of the take-up is coming from the owner-occupier
tenants are staying put, in turn reducing the number of leasing sector who are taking advantage of the current market environment
enquiries recorded. of low interest rates, availability and the expectation that rents are
likely to start increasing at a faster rate sooner rather than later.
Although new build premises are capturing rent rises due to Anecdotally, the rent versus mortgage payment equation has been
construction costs increases, rents for existing premises have investigated by many — including the banks — often finding that
been more stable over the past year. However, the tension is the option should be pursued, especially given the upside potential
mounting and it is likely that landlords will look to increase of capital value appreciation, which has been remarkable in
rents shortly. The exception is the owners of older, less efficient, Hamilton over the past year.
secondary space which will likely face greater resistance from
Although the rural sector remains in the spotlight for most New
tenants to such discussions.
Zealanders, and is a prominent industry in the Waikato, the focus
Occupier demand remains broad based, but still particularly and intensification has been on the farm in recent years. This has
focused on the building sector and the ports and logistics sector. meant that there was limited exposure to the industrial sector this
The underlying demand for space and steady rental cash flow has cycle with the farming community regarded as being ‘net divestors’.
been a key reason for high levels of investor and owner-occupier However, the number of investors for sub-$5 million properties
activity. The market is still dominated by locals, but an increasing remains strong, a feature of all industrial markets across New
number of investors from outside the region are more actively Zealand. The number of investors in Hamilton’s industrial sector
participating in auctions and negotiations. has started to increase as they take into consideration some of the
benefits of ownership like low maintenance and management fees.
The level of enquiry for sub-$5 million industrial property has kept
competition high, with increasing purchase prices seeing yields In a sector that is showing growing levels of optimism and activity,
often reaching 5% with firmer yields for sub $2 million properties. the one disconnect is the significant amount of land supply
currently zoned or with the potential for future industrial zoning as
There is little reason for the positive vibe in the sector to dissipate identified in the District Plan by Hamilton City Council.
over the medium term. The increasing number of businesses,
Colliers International’s latest Vacant Industrial Land survey showed
together with the expansion of existing businesses, is supported
that there is currently 297 ha of land available, with a further 527
by population growth, increasing construction activity and rising
ha of non-industrial zoned land earmarked for potential future
volumes at New Zealand’s largest freight gateway port.
industrial use. In the past year, industrial zoned land absorption
increased to 41ha with prominent sales like Ports of Auckland’s
purchase of 33ha boosting demand and generating opportunities.
3 Hynds Rd 220 Ellis St
Gate Pa, Tauranga Frankton, Hamilton
3 Hynds Road sold for $4.95m to a private investor reflecting an 8% 220 Ellis St sold for $3.55m to a private investor reflecting an 8.08%
yield. The 4,280 sqm property is situated on a 6,220 sqm freehold site. yield. The property is anchored by Fletcher Steel limited and their
The property has a new 5-year lease plus right of renewals with a current lease has recently been renewed to 2018 with renewals
rental income of $396,000 p.a. through to 2021. The 3,830 sqm property returns a net income of
$286,882 p.a.
11Dunedin "The number of investors
The limited opportunities to develop more modern, quality industrial
space in the Dunedin market is driving the continuing gap between for sub-$5 million properties
prime and secondary property performance. Demand outweighs
supply in the prime sector, leading to increasing rents. remains strong, a feature of
The lower demand for less modern, secondary buildings in New all industrial markets across
New Zealand."
Zealand’s oldest town, is keeping vacancy rates high. We are seeing
a rising number of tenants missing out on prime space, reluctantly
staying put, with some investigating new build opportunities
especially as business confidence grows.
Several strongly performing local and national businesses are
undertaking major industrial development projects in Dunedin:
brewing giant Lion is constructing a $6 million facility in Anzac
Ave on a 1.4 ha site for local brewery Emerson’s, Port Otago
subsidiary Chalmers Properties is building a $9.45 million, 4,650
sqm warehouse and office for Steel & Tube on an 8,000 sqm site at
197 Fryatt St and Pallet provider Chep New Zealand has opened a
$4 million office and warehouse development in Sturdee St.
Investment activity remains buoyant, but the high number of
leasehold properties and the reluctance of owners to sell in a tight
market has slowed activity in recent months. This has kept values
appreciating. When good opportunities do arise, they are well
received and competed for by investors and owner-occupiers.
The majority of purchasers are locals, with a number of smaller
value lot premises within the region also enjoying some of the
country’s largest gaps between debt costs and returns. A recent
example includes 9-11 Lorne St which sold mid-last year, partially
vacant for $600,000 at a yield of approximately 8% based on a fully
leased basis. Opportunities for owner-occupiers are also available
with a vacant building on leasehold land at 353 Andersons Bay Rd
one example which was also sold mid-last year for $650,000.
Emerson’s Brewery Development
Anzac Ave, Central Dunedin
Brewing giant Lion has completed a $6 million facility on Anzac Ave for
local brewery Emerson’s. Emerson’s are relocating from their current
facility located in Wickliffe St. The new site of approx. 1.4 ha sits on a
main arterial route, in close proximity to Forsyth Barr Stadium.
12A Selection of New Zealand Industrial Leasing Activity
Address Precinct NLA (m2) Date Tenant
AUCKLAND
40-44 Victoria St Onehunga, Auckland 21,000 Q2 2016 Geodis Wilson
15 Kerwyn Ave East Tamaki, Auckland 13,000 Q1 2016 New Zealand Panels Group Ltd
4 Henderson Pl Penrose, Auckland 11,363 Q3 2015 Compac
20 Timberly Rd Mangere, Auckland 9,000 Q1 2016 Winstone Wallboards Ltd
8-10 Gabador Pl Mt Wellington, Auckland 8,341 Q2 2016 Fletcher Steel Limited
1 Turin Pl East Tamaki, Auckland 8,272 Q3 2015 Carter's Tyre Service
30 Highbrook Dr East Tamaki, Auckland 8,041 Q2 2015 Move Logistics
827-831 Great South Rd Mt Wellington, Auckland ~ 6,000 Q4 2015 Ideal Electrical
17-19 Patiki Rd Avondale, Auckland 4,316 Q4 2015 Starz Evil Dead NZ Ltd
63 Tidal Rd Mangere, Auckland 2,970 Q3 2015 Scott Technology
153 Pilkington Rd Panmure, Auckland 2,833 Q2 2016 Waste Management NZ Ltd
24 Lady Ruby Dr East Tamaki, Auckland 2,560 Q4 2015 Sunnyside Glass Co
8 Hotunui Dr Mt Wellington, Auckland 2,140 Q3 2015 Connect 8 Ltd
15 Kerwyn Ave East Tamaki, Auckland 1,950 Q4 2015 Construction Techniques Group Ltd
8 Crooks Rd East Tamaki, Auckland 1,430 Q2 2016 Daikin Australia Pty Ltd
6b Donnor Pl Mt Wellington, Auckland 1,100 Q1 2016 AV Events
WELLINGTON
9-15 Meachen St Seaview, Lower Hutt 3,366 Q2 2015 NZ Post
39-49 Randwick Rd Seaview, Lower Hutt 3,710 Q1 2016 Precision
111 Eastern Hutt Rd Wingate, Lower Hutt 2,318 Q2 2015 Mexican Supplies
10 Surrey St Tawa, Wellington 2,039 Q4 2015 Connetics
Broken Hill Rd Elsdon, Porirua 1,778 Q2 2016 Placemakers
16 Shakespeare Ave Trentham, Upper Hutt 1,480 Q2 2016 Hyundai
13Address Precinct NLA (m2) Date Tenant
CHRISTCHURCH
Dakota Park Christchurch Airport 12,500 2015 Freightways
Hornby Quadrant, Sir James Wattie Dr Hornby, Christchurch 12,000 2015 Fletcher Easy Steel
5-9 Hickory Pl Islington, Christchurch 8,838 Q1 2016 Lumberworx Ltd
Cnr Sawyers Arms & Johns Rds Redwood, Christchurch 6,150 Q1 2016 Z Energy Ltd
Buildings 1, 2 & 3, 6-8 William Lewis Dr Sockburn, Christchurch 4,412 Q4 2015 Netlogix Warehousing Ltd
350 Wilsons Rd Waltham, Christchurch 3,305 Q3 2015 Containers & More Ltd
Unit 2 652 Halswell Junction Rd Halswell, Christchurch 2,874 Q1 2015 Cirtex Industries Ltd
HAMILTON
30 Gallagher Dr Frankton, Hamillton 5,080 Q3 2015 Energy Products Ltd
12 Quentin Dr Frankton, Hamillton 4,396 Q1 2016 Truck Stops (NZ) Ltd
220 Ellis St Frankton, Hamillton 3,824 Q3 2015 Fletcher Steel Ltd
Strata Precision Plastics, 10-12 Wickham St Frankton, Hamillton 2,360 Q2 2015 Strata Precision Plastics 2013 Ltd
23A Tasman Rd Te Rapa, Hamilton 1,642 Q1 2016 Leisure Line Caravans
TAURANGA/MOUNT MAUNGANUI
97C Aerodrome Rd Mount Maunganui 5,560 2015 Robert Monk Transport Ltd
69-71 Aviation Ave Mount Maunganui 2,372* 2015 Fabweld Structural Engineers Ltd
126 Aerodrome Rd Mount Maunganui 2,200 2015 Downer Utilities Ltd
133B Totara St Mount Maunganui 250 2015 Reid Rentals
DUNEDIN
Portsmouth Dr South Dunedin 1,233 Q4 2015 Confidential
86 Macandrew Rd South Dunedin 1,030 Q1 2015 Plumbing World
124 St Andrew St Central Dunedin 500 Q4 2015 Central City Auto Repairs
McNab St Kenmure, Dunedin 500 Q1 2016 Confidential
Source: Colliers International Research
*Site area
14A Selection of New Zealand Industrial Sales Activity
Sale Capital
Sale
Address Precinct Price Value Yield (%) Vendor Purchaser
Date
($) ($/m²)
AUCKLAND
127-131 Pilkington Rd Glen Innes, Auckland Q1 2016 $30,300,000 $1,485 Undisclosed Kauri Tamaki Ltd Goodman Property Trust
Otahuhu Power Station, 8-10
Otahuhu, Auckland Q1 2016 $30,000,000 Undisclosed Undisclosed Contract Energy Ltd Stonehill Property Trust
Sparky Rd
319 & 323 Church St Penrose, Auckland Q1 2016 $16,500,000 Undisclosed 6.85% New Zealand Starch Ltd Private Investor
2-8 Jarvis Way East Tamaki, Auckland Q4 2015 $13,000,000 Undisclosed 5.50% Royalwolf Trading NZ Ltd Private Investor
88 Carbine Rd Mt Wellington, Auckland Q4 2015 $12,000,000 $1,975 6.00% 88 Carbine Road Ltd Private Investor
8 Tolich Pl Henderson, Auckland Q3 2015 $11,500,000 $1,930 9.30% Private Owner Private Investor
Vizor Holdings &
64 Victoria St & 11 Spring St Onehunga, Auckland Q4 2015 $10,500,000 Undisclosed Vacant Private Developer
64 Victoria St Ltd
306 Neilson St Onehunga, Auckland Q3 2015 $8,833,333 ~$1,320 7.49% Metals Warehouse Ltd Private Investor
15 Echelon Pl East Tamaki, Auckland Q2 2016 $8,500,000 $2,069 Vacant JKM Ltd Private Investor
3-5 Harbour Ridge Dr Wiri, Auckland Q3 2015 $8,200,000 $2,497 5.88% GDK Property Private Investor
4 Carr Rd Mt Roskill, Auckland Q2 2015 $7,700,000 ~$1,260 7.50% Private Investor Undisclosed
Bunnings Trade Centre, 494A
Avondale, Auckland Q3 2015 $7,580,000 Undisclosed 6.45% Bunnings Private Investor
Rosebank Rd
12 Cape Hill Rd Pukekohe, Auckland Q3 2015 $5,300,000 ~$730 9.10% Private Vendor Private Investor
Northridge Estate (2001)
198 James Fletcher Dr Otahuhu, Auckland Q2 2016 $5,100,000 $1,325 7.10% Jfd 198 Ltd
Ltd
48-50 Stonedon Dr East Tamaki, Auckland Q3 2015 $4,850,000 ~$1,350 Vacant Stonedon Nominees Private Investor
19-21 Hill St & 4 Newsome St Onehunga, Auckland Q2 2016 $4,471,000 Undisclosed Undisclosed Public Trust 415 Ti Rakau Ltd
4 Cebel Pl North Harbour, Auckland Q4 2015 $4,200,000 $840 Undisclosed Private Vendor Private Investor
8 Kirkbride Rd Mangere Bridge, Auckland Q2 2015 $4,000,000 $1,008 Vacant Elevator Group Inc. Austin Management Ltd
15 Inlet Rd Takanini, Auckland Q2 2016 $3,375,000 $983 9.57% Trade Depot Ltd Private Investor
55 Greenmount Dr East Tamaki, Auckland Q1 2016 $3,650,000 $1,557 6.50% Private Vendor Private Investor
14 Peters Way Silverdale, Auckland Q1 2016 $3,125,000 $2,253 5.79% Oasis Group Holdings Ltd Private Investor
WELLINGTON
Todd Park, 9-15 John Seddon Dr Elsdon, Porirua Q3 2015 $33,000,000 $632 8.86% Rockport Holdings Ltd MAAT Group
Trent Property Holdings
Dante Rd/Alexander Rd Trentham, Upper Hutt Q3 2015 $9,999,990 $274 7.19% Camperdown Studios Ltd
Ltd
Gracefield Investments Ltd Land Innovation No.1 Ltd
120 Hutt Park Rd Gracefield, Lower Hutt Q4 2015 $8,500,000 $1,122 8.47%
(Anaro) (Burrell)
11-13 Barnes St Seaview, Lower Hutt Q2 2015 $6,100,000 $508 Vacant Foodstuffs Private Investor
11 Bell Rd South Gracefield, Lower Hutt Q3 2015 $6,000,000 $527 9.99% Bell Road Properties Ltd Private Investor
1E Quadrant Dr Gracefield, Lower Hutt Q4 2015 $3,550,000 $708 Vacant Manchester Unity Metco Engineering
15 Raiha St Elsdon, Porirua Q1 2016 $2,900,000 $1,050 8.21% Private Vendor Rica Ltd
92-96 Hutt Rd Kaiwharawhara, Wellington Q2 2015 $2,475,000 $803 Vacant Private Vendor Private Investor
Brunswick St Properties
25-27 Brunswick St Central Lower Hutt Q4 2015 $2,380,000 $1,916 7.13% Private Investor
Ltd (Hodge)
6D Broken Hill Rd Elsdon, Porirua Q2 2015 $2,040,000 $1,437 8.45% Broken Hill Nominees Ltd Tahi Investments Ltd
CHRISTCHURCH
Progressive Distribution Centre,
Hornby, Christchurch Q4 2015 $39,525,000 Undisclosed 6.97% Virgo Group Augusta Capital
146 Shands Rd
Glassworks Industrial Park,
Halswell, Christchurch Q4 2015 $38,900,000 $947 Undisclosed Goodman Nominee Nz Ltd Mainland Capital
652 Halswell Junction Rd
Belfast Business Park
Factory Rd Belfast, Christchurch Q4 2015 $12,500,000 Undisclosed Undisclosed Silver Fern Farms
North
58 Hazeldean Rd Addington, Christchurch Q1 2015 $9,700,000 ~$2,067 Undisclosed Crane Distribution Graeme Allen
12-14 Birmingham Dr Middleton, Christchurch Q2 2015 $7,248,827 $1,256 Undisclosed Main Trunk Holdings Ltd Stuart Leck
Buchanan Property
51 Buchanans Rd Hei Hei, Christchurch Q2 2016 $5,650,000 $520 Undisclosed Lesmau Investments Ltd
Syndicate
78 Treffers Rd Sockburn, Christchurch Q1 2016 $5,155,000 $465 12.40% 78 Treffers Ltd Private Investor
15Sale Capital
Sale
Address Precinct Price Value Yield (%) Vendor Purchaser
Date
($) ($/m²)
HAMILTON
6 MainSt Pl Te Rapa, Hamilton Q1 2015 $4,000,000 $1,552 8.70% Private Vendor Private Investor
13, 17 & 22 Norris Ave Te Rapa, Hamilton Q3 2015 $3,550,000 $1,141 7.38% Private Vendor Private Investor
220 Ellis St Frankton, Hamilton Q1 2016 $3,550,000 $928 8.08% Private Vendor Private Investor
Auckland Based Private
Air Liquide, Cnr Maui St & Tawn Pl Te Rapa, Hamilton Q1 2016 $2,680,000 $3,554 7.03% Private Vendor
Investor
Eastside Refrigeration, 139 Maui St Pukete, Hamilton Q2 2015 $2,450,000 $1,946 6.73% Private Vendor Private Investor
TAURANGA/MOUNT MAUNGANUI
3 Hynds Rd Gate Ta, Tauranga Q1 2016 $4,950,000 ~$1,156 8.00% Currie Family Trust Private Investor
66-68 Portside Dr Mount Maunganui, Tauranga Q1 2016 $4,000,000 ~$1,503 6.70% Ernluc Trustee Ltd Private Investor
2-6 Maru St Mount Maunganui, Tauranga Q1 2016 $3,250,000 ~$1,718 6.10% Leyland Holdings Ltd KML Trust
68 Glenlyon Ave Greerton, Tauranga Q1 2016 $2,300,000 $1,136 6.52% Promotre Corporation Ltd Reed Family
11 Newton St Mount Maunganui, Tauranga Q2 2016 $1,410,000 ~$3,133 4.70% Gavan Holdings Ltd Sunnyvale Enterprises Ltd
DUNEDIN
Southern Cross Forest
34 Carncross St North Taieri, Mosgiel Q1 2015 Confidential Undisclosed 11.72% Products Ltd (In Private Investor
Receivership)
Source: Colliers International Research
"The industrial sector is well
founded in its optimism."
16A Selection of New Zealand Infrastructure Updates
Estimated
Infrastructure Project Project Type Status Project Information
Completion
AUCKLAND
Upgrading SH20A will improve journey reliability for traffic to and from Auckland Airport. Safety
for all road users will be improved by separating motorway traffic from local traffic at the Kirkbride
SH20A to Airport Road Improvements Construction Late 2016
road intersection. This will reduce the high number of crashes as well as provide a much safer
journey for pedestrians and cyclists crossing Kirkbride Rd.
Operational by Once complete, the Western Ring Route will be an alternative to Auckland’s State Highway 1, linking
The Western Ring Route Road Improvements Construction 2017 and fully Manukau, Auckland, Waitakere and the North Shore, improving network resilience, travel time
complete by 2021 reliability and bus shoulder lanes, and upgrading cycleway and pedestrian facilities.
The Southern Corridor Improvements Project covers the stretch of Southern Motorway (SH1) from
Infrastructure the SH20/SH1 connection at Manukau down to Papakura in the south. The purpose of the project is
Auckland Southern Corridor Design Late 2018
Upgrade to address existing bottlenecks at several locations along the Southern Motorway to provide a more
reliable trip for all road users.
Old Mangere Bridge Bridge Replacing the Old Mangere Bridge to provide the community with a safe, high quality walking and
Design 2018
replacement project Replacement cycling connection between the Onehunga and Mangere Bridge communities.
Auckland Transport, Auckland Council and the NZ Transport Agency are working together on plans
Transport for future urban Study &
Investigation 2042 for future transport networks in the four new urban areas identified for development in Auckland
growth in Auckland Investigation
over the next 30 years.
East West Connections is a programme that aims to identify and address transport issues in the area
Public Transport,
between Onehunga, Penrose, Mt Wellington, Mangere, Otahuhu and East Tamaki. The aim of the
East West Connections Road Management, Investigation TBC
programme is to make sure people can easily move around their community, get to their jobs on time
Walking & Cycling
and businesses can continue to supply us with goods we want by providing an efficient network.
TAURANGA/MOUNT MAUNGANUI
Formerly known as the Maunganui Girven intersection (MGI) improvements project, the Baypark to
Baypark to Bayfair link
Road Improvements Construction 2019 Bayfair link upgrade will provide improvements to the Te Maunga intersection to the Maunganui Rd/
upgrade
Girven Road intersection.
The Transport Agency is working with Tauranga City Council to improve Tauranga’s central
corridor. The Hairini Link project covers the stretch of road between the Maungatapu and Hairini
Hairini Link Road Improvements Investigation TBC
roundabouts (State Highway 29), Cameron Rd, including 15th Avenue, Turret Road and the Hairini
Bridge.
17Estimated
Infrastructure Project Project Type Status Project Information
Completion
WELLINGTON
The Wellington Northern Corridor improvements will ensure the SH1 route between Wellington
Road Improvements,
Wellington Northern Corridor Airport and north of Levin provides safe, efficient and reliable travel that communities and
Road Maintenance, Design 2017-2024
(Including Transmission Gully) businesses can rely on to grow and prosper. The improvements are being constructed across eight
Road Management
different sections.
The NZ Transport Agency and its council partners are investigating ways to make State Highway 58
SH58 improvements Road Improvements Construction Early 2018
(from Haywards Hill towards Pauatahanui) safer for everyone who uses it.
Construction This project will significantly alleviate congestion on the busiest part of the Wellington Northern
Petone to Grenada Link Rd Road Management Investigation is scheduled to Corridor between Grenada and Wellington. It will play an important role in optimising the rest of the
begin in 2019 Wellington Northern Corridor by helping the benefits of the other sections to be fully realised.
CHRISTCHURCH
The Christchurch Rds of National Significance programme will provide critical access to and
Roads of National On-going
Christchurch Motorways Construction from the Christchurch central business district, Christchurch International Airport and the Port of
Significance (2012-2019)
Lyttelton.
The Northern Corridor provides improved access to Lyttelton Port and the Christchurch CBD from
Christchurch Northern Roads of National
Design 2019 the north of Christchurch. The project is an extension of the Christchurch Northern Motorway that
Arterial Significance
bypasses the suburbs of Belfast and Redwood to the east to connect with QEII Dr.
Construction is
Woodend Corridor This project will increase the capacity of SH1 between Pineacres and Pegasus. Improve the road
Road Improvements Investigation scheduled to begin
Improvements safety, accessibility and liveability of Woodend for residents.
in 10-15 years
DUNEDIN
SH88 Dunedin to Port Construction is Providing a safe alternative route for pedestrians and cyclists to State Highway 88 (SH88) between
Chalmers walking & cycling Walking & Cycling Design scheduled to begin Dunedin and Port Chalmers, is the main reason for building this shared path along the western edge of
path project in at least 2018 the Otago Harbour.
A proposal is being developed by the Transport Agency, to significantly improve cycle safety on the
Dunedin one-way system
Walking & Cycling Design TBC one-way highway system through north and central Dunedin, by providing cycle lanes that physically
separated cycle lanes
separate cyclists from traffic.
Source: NZTA, Colliers International Research
For further information visit: http://www.nzta.govt.nz/projects/
18A Selection of New Zealand Industrial Developments
Estimated Owner /
Project Name/Address Precinct NLA (m²) Status Comments
Completion Developer
AUCKLAND
Under
63 McLaughlins Rd Wiri 6,900 Q1 2016 Euroclass New development for Transport Investments Ltd
Construction
Under
246 Puhinui Rd Wiri 4,750 Q1 2016 Private Private warehouse development
Construction
Under Southpark New design build facility for Star Products
117 Hugo Johnston Dr Penrose 2,800 Q1 2016
Construction Corporation (The Aromatherapy Company)
One of two warehouse and office developments
Goodman
31 Business Parade North East Tamaki 6,950 Proposed Q1 2016 at Highbrook to be undertaken by Goodman on an
Property Trust
uncommitted basis.
One of two warehouse and office developments
Goodman
33 Business Parade North East Tamaki 3,450 Proposed Q1 2016 to be undertaken by Goodman on an uncommitted
Property Trust
basis.
The CSR Viridian expansion will total over 18,000
HIghbrook Business Park, Under Goodman
East Tamaki 7,793 Q1 2016 sqm once completed and will feature extensive yard
CSR Vridian Expansion Construction Property Trust
and hardstand areas.
The Landing Precinct Airport Corridor 12,000 Proposed Q1 2016 Auckland Airport Purpose built facility for Coca-Cola Amatil
Holden Ltd has also committed to a 2,002 sqm
Savill Link, Holden New Goodman
Otahuhu 2,002 Proposed Q2 2016 warehouse expansion that utilises the full site area
Zealand Property Trust
at its distribution centre in Savill Link, Otahuhu.
Under
296 Neilson St Penrose 15,500 Q2 2016 Wineworks Bottling and wine storage facility for wineworks
Construction
Under Jomac New Design Builod facility for the tap wear
41 Jomac Pl Avondale 5,500 Q2 2016
Construction Construction manufacturer Methven
Under Jomac
27 Jomac Pl Avondale 2,800 Q3 2016 New Design Build facility for Thorn Lighting
Construction Construction
M20 Business Park,Orora Goodman Manufacturng and warehousing facility for Orora
Manukau/Wiri 11,324 Proposed Q3 2016
Development Property Trust Packaging
M20 Business Park, Spec Goodman
Manukau/Wiri 3,300 Proposed Q3 2016 Spec development adjacent to Orora
Development Property Trust
Under
221 Ihumatao Rd Airport Corridor 53,610 Q4 2016 Auckland Airport New Sistema factory. Commenced in Q3 2015
Construction
Under
78 Cryers Rd East Tamaki 7,667 Q4 2016 Private Owner occupier development for Transnet
Construction
Under
100 Cryers Rd East Tamaki 7,500 Q4 2016 Aintree Group New warehouse for SIMX
Construction
Stride Property Warehouse A & B comprising 5,050 sqm and 2,180
1 O'Rorke Rd Penrose 7,230 Proposed Q4 2016
Ltd sqm. Construction mid 2016
19Estimated Owner /
Project Name/Address Precinct NLA (m²) Status Comments
Completion Developer
WELLINGTON
Placemakers Porirua, Broken
Elsdon, Porirua 6,862 Completed Q1 2016 Mike McCombie Prenail Truss and Frame plant
Hill Rd
Placemakers Seaview, Seaview, Lower Wallace
6,740 Commenced Q3 2016 Retail and Trade Depot
49 Seaview Rd Hutt Developments
CHRISTCHURCH
Fletcher Easy Steel, Hornby Nearing
Hornby 12,000 Q3 2016 Calder Stewart Design build for Fletcher Easy Steel
Quadrant Development Completion
NZ Trucks/AB Equipment,
Under Design build for NZ Trucks/AB Equipment (Hellaby
Hornby Quadrant Hornby ~6,500 Q1 2017 Calder Stewart
Construction Holdings)
Development
Christchurch
Christchurch Under
Freightways, Dakota Park 12,500 Q4 2016 International Design build for Freightways
Airport Construction
Airport
HAMILTON
Under
Arthur Porter Dr Hamilton 7,600 Q4 2016 Porter Group Porter Parts Building - Stage 2
Construction
Arthur Porter Dr Hamilton 4,600 Proposed Q4 2016 Porter Group Porters Farm Workshop - Stages 3-5
Bunnings, 11 Quentin Dr Hamilton Lake 13,300 Proposed Q4 2016 Bunnings Ltd Bunnings warehouse design build
DUNEDIN
Chalmers Chep has relocated to a new $4m office and
Sturdee St Central Dunedin 2,000 Completed 2015
Properties Ltd warehouse development
Dukes Rd North Taieri 1,051 Completed Q1 2016 Farmlands New build facility for Farmlands store
Lion Nathan is constructing a $6m facility for
Anzac Ave Central Dunedin Unknown Completed Q2 2016 Lion Nathan
Emersons
$9.45m warehouse and office complex for Steel
Chalmers
197 Fryatt St Central Dunedin 4,650 Construction Q4 2016 & Tube to be constructed on the former Northern
Properties Ltd
Southland Transport site.
Source: Colliers International Research
Outlook
Access to suitable levels of stock remains a vital ingredient for but not for long. Vacant land is now being absorbed at a faster rate
any expanding market. For the industrial sector, the recurring than experienced over recent years — another prominent trend
commentary surrounding the lack of stock stands out across the throughout the country. This will lead to higher costs for new builds
country with many main markets struggling to keep up due to and rents, albeit some developers may be able to offset the higher
demand outweighing supply. This is a trend likely to continue. required rental returns for feasibility calculations, given the higher
cap rates being achieved.
For some time now, the majority of the focus has been on high
quality modern premises which allows tenants greater efficiency Investors are ‘yield-hungry’ and low debt costs are driving market
and more productivity while providing owners with less capital sentiment. The key characteristic at the moment is that the industrial
expenditure, seismic strengthening or other major maintenance sector is enjoying a positive period of economic growth. This is
requirements. However, given the strong demand environment, supported by the stability in the manufacturing sector’s number
there is evidence now that demand is overflowing and spreading of businesses and employment expectations as well as the rising
into the secondary sector as tenants and investors have importance and strength of the construction and transport, postal
diminishing choices. and storage sectors.
This market dynamic between demand and supply is leading Because of these features, the current medium-term outlook for
to another strong round of development activity. However, not the industrial sector remains robust. Yields are continuing to reach
all locations have land available for suitable (and profitable) record lows. Although strong bidding and more tenants moving
development. The common reasons behind this are: tight into secondary quality properties may be considered to be a signal
ownership, increasing land values or geographical constraints the market is nearing its cyclical peak, we expect current positive
like neighbouring hills or harbours. In locations that do have conditions will continue. Until we see greater signs of profit-taking
sizeable tracts of ‘ready-to-go’ land like Ruakura in Hamilton or and euphoric market trading, the industrial sector is well-founded
Tauranga’s Tauriko Businesss Park, the pressure has been reduced, in its optimism.
20For more information contact: Colliers International research and consulting
Alan McMahon offers a range of commercial and residential
National Director | Research & Consulting property solutions:
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Director | Research & Consulting • Demand and Supply Studies
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Director | Strategic Consulting • Feasibility Analysis
• Catchment Analysis
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Research Analyst • Site Options Analysis
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Research Analyst • Financial Analysis
• Business Cases
Aimee Simpson
Research Co-ordinator
Colliers International
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Whilst all care has been taken to provide reasonably accurate information within this report, Colliers International cannot guarantee
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