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Turnaround Time Seaview/Gracefield... the heart of Wellington’s industrial sector. Regional vacancy edges down Wellington industrial vacancy rates are Wellington Industrial Vacancy Rate - All Precincts retreating from their 2012 peak, despite 8.00% the total inventory increasing. While the 7.00% Wellington economy has remained subdued over the last year, the overall vacancy rate 6.00% within key industrial precincts has fallen, 5.00% albeit by a relatively modest amount. 4.00% Bayleys Research’s latest Wellington Industrial Survey shows the total vacancy Vacancy Rate 3.00% rate across Seaview/Gracefield, Petone, 2.00% Grenada, Ngauranga and Miramar/ 1.00% Rongotai edged down to 7.2% from the 0.00% 2012 total of 7.5%. This broke a run of 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 six annual increases which more than July Source: Bayleys Research doubled the rate from a low of under 3% in 2006. The decline was the result of substantial falls within the Grenada Wellington Industrial Vacancy Rates By Precinct (July 2010 to July 2013 and Miramar/Rongotai precincts – which 14% previously had double digit vacancy rates 2010 2011 2012 2013 12% – offsetting small increases elsewhere. 10% While it experienced the most 8% significant increase in vacancy following the departure of a number of occupiers, 6% the biggest of which was Hot Chilly, Vacancy Rate 4% Ngauranga still has the region’s equal 2% 0% lowest vacancy rate, at 6.6%. Grenada Miramar & Ngauranga Petone Seaview Total Rongotai The precinct has now experienced Source: Bayleys Research vacancy rises in two consecutive surveys since bucking the overall trend in 2011 Ngauranga Investment Trends when it was the only one to register a Yield Forecast Demand Availability Land Value $/m2 decline in vacancy. While its vacancy rate 7.25% - 9.25% Sufficient Scarce 350 - 500 does tend to be fairly volatile due to its Leasing Trends relatively small scale, Ngauranga has lost W/House ($/m2) Office/Show ($/m2) Rental Trend Demand Supply a number of notable tenants over recent 80 -150 140 - 200 Steady Sufficient years. The specialised nature of many of the buildings, which feature high office Grenada Investment Trends components, has resulted in them being Yield Forecast Demand Availability Land Value $/m2 hard to re-let. 7.5% - 10.5% Sufficient Scarce 180 - 250 TURNAROUND TIME The latest increase would have been more pronounced had approximately Leasing Trends FOR WELLINGTON INDUSTRIAL 1,500m2 of space vacated by Interserve W/House ($/m2) Office/Show ($/m2) Rental Trend Demand Supply not been leased to Lewis’s Home Fabrics. 80 -150 90 - 160 È Soft Surplus That company has relocated from its Source: Bayleys Research It’s been a long time coming but a recovery is now evident in the Wellington industrial original Tawa base where the land is property market, with a combination of factors pointing to a more positive outlook for required for the Transmission Gully project. The precinct’s total inventory has The region’s two largest industrial the region. Ian Little, Bayleys Research senior analyst, reports. The precinct, however, enjoys a grown over the past two years as a result precincts, Petone and Seaview/Gracefield number of key benefits such as excellent of new development, the most significant in Lower Hutt, experienced little change in access to the regional motorway network, being purpose-built premises for Coca overall vacancy. Seaview’s rate increased pick up in leasing activity and with the overall vacancy rate in these developers while work has finally a high profile, centrally positioned location, Cola, New Zealand Micrographic marginally, however, most of its vacancy and a modern high quality supply of Services Ltd (NZMS) and Initial Rentokil is concentrated within the precinct’s older A continuing demand for vacant precincts decreasing this year for the commenced on the long awaited premises from owner occupiers has first time since 2006. This has occurred Northern Corridor, a new highway buildings that will continue to attract both in Jamaica Drive. and poorer quality buildings. Agency resulted in an increase in the amount of despite an increase in the overall supply between Levin and Wellington which tenant and investment interest. The precinct has also seen a lift reports suggest that there is strong space being absorbed by businesses in of floor space resulting from increased will significantly assist businesses with Heading up State Highway One, in leasing activity over the past 12 demand for smaller premises within the Wellington’s leading industrial suburbs development of new premises and the speed to market. Part of this highway halfway between Ngauranga and Porirua, months, attracting new occupiers 200m2 to 1,500m2 range, which are in over the past three years. refurbishment of older premises. will link with an expanded regional Grenada experienced the most significant such as Hot Chilly which has expanded short supply within Seaview. This has put a brake on the sharp Hutt City Council is helping to airport at Paraparaumu with associated decline in vacancy, falling to 6.6% from into new premises of approximately A number of owners of older, large increase in vacancy levels that occurred stimulate activity in the region through plans for a major business hub for the 9.9% in 2012, and putting it on level 2,500m2, vacating just under 1,000m2 scale premises are adopting a holding following the Global Financial Crisis, a proactive incentive package for Kapiti Coast. pegging with Ngauranga. in Ngauranga. position accepting lower rental rates 14 TOTAL PROPERTY TOTAL PROPERTY 15 in order to attract and retain tenants. Big Save Furniture has purchased Seaview Investment Trends The selected parties now move to the final existing bottle necks and more hazardous Recent leases of dated, low stud premises previously occupied by Feltex tendering stages of the process and it is stretches of State Highway 1. Yield Forecast Demand Availability Land Value $/m2 buildings have been concluded at rentals Carpets at Waiu Street in Wainuiomata. anticipated that the PPP contract will be 8.5% - 11.0% Sufficient Scarce 150 - 350 Kapiti Coast Airport as low as $30-$40 per m2. The company acquired the site and awarded in mid 2014. The improvement in the highway network Petone’s vacancy rate remains Leasing Trends 10,000m2 factory for $1,000,000 with a The two consortia are made up of will be particularly beneficial to business largely unchanged from the 2012 total, 2 2 view to relocating its national distribution W/House ($/m ) Office/Show ($/m ) Rental Trend Demand Supply New Zealand-based and international precincts north of the city such as Porirua, reflecting the on-going popularity of the centre from Porirua because the property 50 - 110 90 - 140 Steady Sufficient organisations. Each has a construction Upper Hutt and the Kapiti Coast. In the generally smaller workshops which make offers more space for future expansion firm working in partnership with road case of the latter, business activity will up a majority of the precinct’s inventory. which Big Save believes will be necessary Petone Investment Trends designers, investors and companies able be further bolstered by confirmation that No other precinct within the region offers 2 in the next few years. Yield Forecast Demand Availability Land Value $/m to maintain and operate the road. The direct daily flights to Christchurch from small engineering and manufacturing Masterpet is to occupy newly 7.5% - 9.0% Strong Scarce 500 - 700 Wellington Gateway Partnership’s lead Kapiti Airport at Paraparaumu are to companies the range of accommodation developed premises on a 1.9 hectare organisation is Leighton Contractors begin in November adding to the existing options that Petone does. Leasing Trends site at 143-149 Hutt Park Road, Lower Pty Ltd, while John Laing Investments Auckland service. There are fewer larger properties W/House ($/m2) Office/Show ($/m2) Rental Trend Demand Supply Hutt formerly occupied by Exide. The Ltd has taken the lead role for the other The airport’s mixed use business available resulting in some migration of 80 -120 100 - 140 Soft Sufficient property was purchased for $3,800,000 consortium, Positive Connection. park – known as Kapiti Landing – has tenants from the area when they are by Auckland based developer Kea Transmission Gully is a 27 kilometre been the primary focus of commercial looking to expand. A recent example of Eastern Suburbs Investment Trends Developments which has previously section of the Wellington Northern development in the area over recent years. this is Label and Litho which has moved Yield Forecast Demand Availability Land Value $/m2 worked in conjunction with Masterpet Corridor Road. It will be an important Approximately 70 hectares of the 127 to Gracefield in search of larger space on other projects. Kea will demolish the 8..0% - 9.0% Ç Strong Scarce 500 - 900 connector for freight travelling between hectare Paraparaumu airport site has been having traded from Petone for more than existing buildings on the site and develop Leasing Trends Wellington’s ports and the lower and designated for a range of light industrial, 30 years. This move has been replicated a purpose-built 9,455m2 distribution 2 2 central North Island, bypassing many commercial and retail activities. by Crown Forklifts which has decided to W/House ($/m ) Office/Show ($/m ) Rental Trend Demand Supply centre for Masterpet. move on from its Gear Street base, which 80 -150 100 - 200 Steady Scarce Infrastructure Upgrades it has occupied
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