Auckland North West Industrial Market Snapshot Q3 2019
The North-West industrial market is supported by high demand and strong market performance within the overall Auckland market.
The North-West industrial market is supported by high demand and strong market performance within the overall Auckland market. The area continues to attract industrial occupiers and developers to take advantage of the area’s infrastructure growth and availability of land. Many businesses are identifying North-West as their preferred location, including global bulk discount retailer, Costco.
Identified as one of the key urban growth areas by Auckland Council, population in the North-West is anticipated to increase from 9,000 to approximately 94,000 by 2046, a 944% growth. Multiple infrastructure plans are in place to facilitate this growth, including $300m allocated from the Housing Infrastructure Fund (HIF) and the proposed $2.3b light rail project.
Persistent high demand and tight vacancy across the region will continue to drive the supply pipeline in the North-West. Despite construction and land costs increasingly encroaching on unfeasible levels, a number of new developments continue to enter the pipeline.
Future supply is expected to be focused in the Westgate area specifically. The recently announced Westgate Costco warehouse will be approximately 14,000 sqm, provide over 800 carparks, with a price tag of around $90m dollars. Other notable Westgate developments in planning include Kakano Business Park and Northside Business Park. All of which are expected to be delivered over 2021.
Land values continue to rise for all industrial precincts due to the lack of land available. Based on recent transactions, North-West industrial land values generally sit within the range of $500-700 psm, compared to the Auckland Region range of $450-$775 psm. A notable transaction for Q3 was a vacant industrial site spanning 8,110 sqm at 11 Northside Drive, sold for $4.8m or $590 psm.