Auckland City industrial market snapshot Q1 2021
Average prime Auckland city industrial rents rose to $171 psm q-o-q while average secondary industrial rents have remained at $136 psm. Click to read more.
Auckland City industrial vacancy increased by 20bps from 2.2% to 2.4% in 2H20. Penrose and Avondale each saw a fall in vacancy over the half from 2.3% to 2.0% and 4.3% to 3.4% respectively. Mt Wellington and Henderson both saw slight increases in vacancy however, rising from 1.3% to 2.4% and from 1.0% to 2.1% respectively. Looking forward, given continued robust demand for high quality industrial space, prime stock vacancy in particular is expected to remain low for the foreseeable future.
We continue to forecast reasonable levels of new supply which will filter into the market to meet demand, albeit at a slowing rate compared to previous years. We are currently tracking seven projects under construction in the Auckland City industrial submarket. Among the most notable of these is a 3,808 sqm expansion at 15 Rakino Way. Limited supply should continue to support both existing rental levels and low vacancy levels. However reduced construction in the medium term will also naturally result in fewer investment opportunities for scale acquisition.
Average prime Auckland city industrial rents rose to $171 psm q-o-q while average secondary industrial rents have remained at $136 psm since their most recent increase in 4Q19. The surge in industrial land values is one of the major contributing factors in driving rental growth in the Auckland industrial market; particularly for prime assets. We recorded several significant transactions this quarter, including 670-680 Rosebank Road, Avondale ($39m) and 528-558 Rosebank Road, Avondale ($65.55m), both acquired by PFI.