High demand for western and central industrial land
Rosebank Peninsula’s low industrial vacancy rate of 1.5 per cent, has made it challenging to secure premises. Photo / Supplied
There’s rising demand for less industrial land, says Sunil Bhana, Bayleys’ recently appointed central and west Auckland industrial manager.
Bhana, who joined Bayleys in 2001, says virtually no greenfields development land is left in the traditional central Auckland industrial precincts of Mt Wellington, Penrose and Onehunga.
Focus has shifted to new industrial subdivisions opening up in Hobsonville and Westgate, which are significantly enhanced by the completion of the Western Ring Route.
“Take up of land in these subdivisions has been much quicker than the market anticipated, showing how strongly the industrial sector is growing, led by the construction industry,” says Bhana.
He says the Hobsonville Workspace subdivision on vacant land next to Hobsonville Primary School that was sold by Bayleys to The Neil Group, has already sold-out to a mix of owner-occupiers, developers and investors. A neigbouring industrial subdivision developed by Jomac is also being taken up rapidly.
More than 4ha of land has sold off the plans — mostly to other developers and owner occupiers — with Jomac retaining over 10ha as a long-term hold and for future development.
“Further west, industrial subdivisions are quickly taking shape around the rapidly developing Westgate Town Centre,” Bhana says.
“Many developers buying these sites out west already have committed tenants, that they’re constructing new design-build premises for.”
Very low industrial vacancy rates — such as in the Rosebank industrial precinct, where just 1.5 per cent of buildings are vacant — have made it challenging to secure premises plus putting pressure on rentals.
“However, there’s a good level of leasing and sub-leasing activity, with much corporate movement between buildings due to business expansion, mergers and consolidation from multiple locations.”
Some recent west Auckland leases:
- New premium grade industrial premises at 7 Jomac Place, Avondale comprising 1000sq m of high-stud warehousing; 200sq m of offices and amenities and a 110sq m canopy, plus large yard area. Mark Preston and Laurie Bell negotiated the three-year sublease to a pharmaceutical company at a net annual rental income of $135,000.
- An 1846sq m site with a 1273sq m standalone older-style industrial building at 14 Copsey Place, Avondale, leased to grocery wholesalers at $125,000 net pa by Mark Preston and Simon Davies. The lease for five years, with three five-year rights of renewal, encompassed about 1000sq m of warehousing, with three roller doors plus two levels of offices.
- In New Lynn, Mark Preston and Laurie Bell leased a 1500sq m standalone medium-stud industrial building, with around 100sq m of offices at 13 Crown Lynn for nine months, with no right of renewals, at $110,000 net per year.
- Bayleys’ Central West team also leased of a 2203sq m industrial building on a 4880sq m site at a 102 Portage Rd, Otahuhu — a net annual rental of $300,000. Negotiated by James Valintine, Bhana and William Gubb, the long-term lease to a food distributor comprised 1834sq m of high-stud warehousing with nine roller doors and a 2100sq m sealed yard (with 369sq m of office space across two levels).
Bhana says racing demand from owner-occupiers is contributing to the low levels of vacant industrial accommodation.
“Owner occupiers tend to be at their most active when interest rates are low, as they can generally borrow at a similar or lower cost to renting and they often already have a strong relationship with a bank. With borrowing costs forecast to remain low at levels for some time and industrial rentals on the rise, owner occupiers are likely to remain active.”
Bayleys’ national industrial director Scott Campbell says Bhana’s appointment follows the amalgamation of Bayleys’ west Auckland and central Auckland divisions.
Sunil Bhana, Bayleys