West Industrial Market Snapshot Q4 2019
The North West Industrial pipeline is set to provide more than 75,000 sqm of new-build space over the next few years.
High demand and significant low vacancy across Auckland’s industrial precincts continues to attract interest in the North-West markets from developers and occupiers alike. The Council’s numerous infrastructure improvement projects provide additional incentive for demand, with the latest completions being the SH16 expansion between Lincoln Road and Westgate and associated cycleway, all of which opened between December 9th and 19th this quarter. Residential developments are also continuing to progress. Notable examples include the recent release of the Ovation apartments at Hobsonville Point, and the 1,800 new terraced houses and apartments to be constructed as part of the Westwood Gardens development near Westgate.
The North-West precinct continues to see significant construction activity for industrial space despite high construction costs and labour shortages across the region. Availability of greenfield land, lower land values and planned infrastructure improvement projects provide the precinct with solid fundamentals for new development. The pipeline is set to provide more than 75,000 sqm of new-build space over the next few years, with many projects being new-build business parks. A notable example is the 15 lot 4.3 ha Hobson Business Park, which commenced construction in November 2019. Additional projects include the 14,000 sqm Costco, which submitted its resource consent application in November. Given such low vacancy rates and high demand across the Auckland precincts, the pipeline will provide a much needed injection of quality space, driving additional growth.
Land values in the North-West have remained low this quarter at a range of $500-750 psm, compared to $500-$900 psm for the Auckland Industrial market overall. Notable transactions that occurred in 4Q19 include the sale of lots 8 and 9 at 43 Fred Taylor Drive, Westgate for $3,533,360.
*North-West Industrial refers to the Westgate, Hobsonville and Kumeu precincts