Auckland North West industrial market snapshot Q1 2021

Demand

Extremely low vacancy overall continues across the Auckland industrial precincts, and the North West precinct is no exception. This is largely a result of scarcity of development land and available stock, especially in the prime end of the market, across the sector. 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 supported by high pre-commitment on new builds and continuing trends of ‘flight-to-quality’.

Supply

Significant construction activity continued in the North West precinct in 2020. Availability of greenfield land, relatively lower land values and planned infrastructure projects continue to provide the precinct with solid fundamentals for new development. 2020 saw construction begin on Costco's upcoming store in Westgate. The store is expected to cover around 14,000 sqm on its completion in 2022. We also recorded several notable completions in the North West precincts over the year, including Bunnings' new 15,000 sqm store at 21 Fred Taylor Drive.

Asset performance

Land values across the Auckland industrial submarkets grew substantially over 2020, with values in the North West precinct being no exception. Average North West land values grew 30% over the year to December 2020, rising from $625 psm to $813 psm. North West land values remain more affordable than other high-demand industrial submarkets such as Auckland City and North Shore however, where available land remains significantly limited and well sought afer. This surge in industrial land values is one of the major contributing factors in driving rental growth in the Auckland industrial market as a whole.