Te Rapa leads industrial property surge in Hamilton
Results of an annual survey which monitors industrial building stock in Hamilton shows demand outstripping supply
Results of an annual survey which monitors industrial building stock in Hamilton shows demand outstripping supply
The Hamilton Industrial Occupancy Survey, undertaken by CBRE and NAI Harcourts, keeps abreast of trends and movements throughout the city.
It revealed that in the 12 months to December 2017, excluding outlying areas such as Northgate and Hamilton Airport, stock increased by more than 49,000 square metres to 1.68 million sqm.
Nineteen new developments were under construction adding 25,000sqm of stock this year or in early 2019, Theo de Leeuw, director of industrial sales and leasing at NAI Harcourts said.
The overall takeup was 61,635sqm of both new and existing properties across the main industrial areas of Te Rapa and Frankton.
The increase was largely due to the completion of new fully occupied Grade A buildings in Te Rapa North and increased leasing activity in Grade C space in Frankton and Te Rapa South.
At Te Rapa there was 43,060sqm of new developments during the year, while Frankton had an increase of 2440sqm.
Despite the increase in new developments, the survey revealed the overall vacancy rate for industrial properties across the city decreased to 1.5 per cent.
"The majority of new space was spoken for before construction began, and that is also the case with the projects under construction currently," according to Sean Stephens, industrial sales and leasing agent with NAI Harcourts.
Reduction in the amount of space available was a continuing trend, de Leeuw said.
"Take-up has been faster than the builders can keep up with. It's at the lowest level in my experience in 25 years working in real estate."
Growth was being driven by low interest rates, economic confidence and Hamilton's attraction for businesses from outside the region, particularly Auckland.
Development of business premises on Arthur Porter Drive, Hamilton is well under way.
Industrial land prices in Te Rapa were half the rate of key industrial sites in Auckland, and there was a significant discount to Tauranga prices as well," Stephens said.
Hamilton was well positioned, close to key ports of Auckland and Tauranga.
Continued improvements to roading networks would also pay dividends, particularly when the Waikato Expressway was fully completed in 2020, along with inland freight hubs at Horotiu and Ruakura.
Earthworks were well underway for the next stages of the southern precinct of Te Rapa Gateway.
Work had also begun on the massive Tainui Ruakura development to create an inland port for logistics and industrial firms.
Growth to date had also been fuelled by available land for expansion, but further land for growth was running out which may be prove a real issue, de Leeuw said.
"The future lies in further industrial land in Te Rapa North. The pace of growth has increased faster than anticipated and it's not slowing down."
From Stuff.co.nz