Knight Frank - Property View - Spring 2016

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It’s the year of industrial development
as the market responds to
unprecedented low vacancy and a
surge in occupier demand.
The supply of new industrial buildings
in Auckland will top 250,000 square
metres by the end of 2016, a trend we
are likely to see through 2017 as well.
The majority of this new development
is centred in South Auckland and
is being completed by the major
industrial developers. The positive flow
on effect is the easing of the extremely
low vacancy rates as occupiers leave
behind vacant buildings to move
into their new facilities. With overall
industrial vacancy at sub 2% and
prime vacancy at a staggering 0.5%,
the market needs this supply to allow
firms to grow, employ and invest.
New Zealand’s low interest rate
environment and strong business
growth has seen the continued
demand by firms looking to own
their own properties, particularly in
the under $5 million market. Local
investors have continued their
preference for industrial property,
looking to reposition capital into a
market that shows no sign of letting
up, prepared to buy at low yields with
a view to seeing growth in both rental
and capital return.
For occupiers looking to lease or buy,
the extremely low vacancy rates limit
options and extend the time spent to
find the “right” property. The process
needs to start at least 18 months
out from expiry to ensure the best
outcomes can be achieved.
Investors are extremely active; buying,
selling and repositioning capital into
newer premises and disposing of older
investment stock. Smart investors are
willing to accept initial low yields and
short term leases in the comfort the
market will lift the returns and tenants
will renew. There is no or little discount
for risk in this market.
This year’s Property View profiles a
number of speculative developments
and existing buildings either coming
available or available now for
occupation. We also have a few
investment opportunities listed as well.
Please feel free to get in touch with
one of the team and let us know how
we can assist you with your industrial
property requirements.
David Arlidge
Director – Industrial Sales & Leasing
+64 9 377 3700
Build it and the
tenants will come.
It’s the year of
industrial development as
the market responds to
unprecedented low vacancy.
David Arlidge
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