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News Release


It’s all go for development in South Auckland



Long term investment with development potential/new-zealand/en-gb/news/916/long-term-investment-with-development-potentialAUCKLANDLong term investment with development potential
Former Fire Station on high profile corner site/new-zealand/en-gb/news/915/former-fire-station-on-high-profile-corner-siteCHRISTCHURCHFormer Fire Station on high profile corner site

​​Auckland’s Industrial development pipeline is showing signs of re-emerging after a long period of hiatus since the economic downturn, according to JLL’s latest pulse reports. Strong demand from occupiers has driven vacancy to historically low levels which has now spurred on new development particularly in South Auckland.
Consequently the market is now entering into a clear development cycle after the strong demand scenario was met with a thin supply pipeline. A number of design build options are now being worked through with the Auckland market seeing 133,000 sqm of supply added in the six months to June 2014, the largest addition to supply since 2009 which reflected the end of the pre GFC development pipeline.
Most available land in Auckland is situated in South Auckland areas such as Wiri, Airport Oaks and East Tamaki which have become hot spots for new development.
Ben Curran, Industrial Sales and Leasing agent who specialises in the South Auckland Industrial precincts says, “At last there is significant new release of large format design and build land that will alleviate the tight supply of industrial land for development around Auckland's fringes.”
“Auckland airport’s surrounding land, known as the District, is all go for development and future plans estimate approximately 308 hectares of land to be developed.  ‘The Landing’ is also heading into the next stage which is expected to open up around 95,000 sqm of land for warehouse/office development.”
“Other developments underway in South Auckland that will add to the supply pipeline are Stonehill Business Park at 68 McLaughlin’s Road in Wiri, M20 Business Park at 70-100 Plunket Avenue Manukau, and 81 Westney Road, Mangere which could not have come at a better time.”
Justin Kean, JLL’s National Director of Research says, “After a long phase of low supply levels, 2014 represents the first period in a long-time that there are additions to supply in terms of new builds. We anticipate approximately 300,000 to 400,000 sqm of new supply per annum as the pipeline returns to normal production.”
The market is seeing industrial stock return to favour in 2014 with the Auckland Industrial sector seeing total returns of 16.4% for the twelve months to June 2014, after a very limited growth value between 2009 and 2013.
Occupier demand for industrial space in the Auckland region has been extremely strong since economic growth was lifted in the post GFC period. As a result, absorption has been high and vacancy across most industrial markets in New Zealand has decreased significantly in the last year, with values well in excess of the level required to trigger new development.
Since peaking at 8.1% in 2009, Auckland industrial vacancy has subsequently fallen considerably. JLL research figures indicated an annual net absorption of 142,000 sqm in 2009 against an annual supply figure of 105,000 sqm. This under supply scenario was exacerbated through the 2010-2012 period where an average of 46,000 sqm per annum was added to industrial stock compared to an average net absorption figure of 125,000 sqm. The market is currently sitting at 3.9% vacancy which indicates a very low capacity to absorb new demand at a time when economic activity is lifting the outlook and investment intentions of industrial occupiers.