Vacancies fall in leading industrial precincts
A strong economic backdrop has seen business confidence surge over recent months and this in turn has impacted of the improved economic drivers on the industrial sector, reports Bayleys Research,
The latest industrial vacancy survey by Bayleys Research shows vacancy within Auckland’s leading industrial precincts falling from 5.5 per cent to 3.8 per cent.
The survey covers The Airport Corridor, Wiri, Penrose, Mount Wellington, Rosebank Road, East Tamaki and the Albany Basin.
The report says business confidence is sitting at its highest level since 1999 according to the latest ANZ survey while the manufacturing sector registered the highest confidence in 15 years.
Vacancy in the new 2014 survey has fallen in all Auckland precincts compared to last year, with the exception of Wiri, where the figure remained all but unchanged.
The greatest percentage fall was recorded in the Rosebank Road precinct, although volatility is common in this area. The relatively limited size of the precinct means that changing circumstances in a small number of buildings can have a significant impact. A more reliable trend can be drawn from longer term results across the larger precincts.
At the time of the 2012 survey vacancy rates within the Airport Corridor, Wiri and Mount Wellington all stood at over 7 per cent while in the 2014 survey all precincts sit below 5 per cent vacancy.
In the region’s largest precinct, East Tamaki vacancy has fallen to below 4 per cent. The tightening of supply is particularly acute in the 400 sq m to 800 sq m range in which less than 10 vacant units were recorded within the survey area and at the date of the vacancy survey which covers approximately 1 million sq m,
The trends evident in precincts south of the Harbour Bridge are reflected in the North Shore’s Albany Basin where the vacancy rate has fallen from a 2013 level of 5.4 per cent to 4.4 per cent. This result has been achieved despite the total inventory surveyed having increased by approximately 10,000 sq m as construction and refurbishment projects have ended.
Bayleys Research says the results reflect a strong year in the industrial leasing markets.
“Tenants have competed with owner occupiers to secure premises as businesses have moved into expansion mode at a time when the next development phase, hindered by a shortage of land, has yet to gather full momentum.
“The limited supply of vacant space reflected by the latest survey results illustrates why rental levels have risen over the last year.
“Landlords have also been able to secure longer leasing terms as firms look to secure their position in the increasingly competitive environment.”
See two graphs below