Auckland South industrial market snapshot Q1 2021
In 2H20 the vacancy level in South Auckland industrial property increased slightly from 1.6% to 2.1%.
In our 2H20 Vacancy Survey, overall Auckland south industrial vacancy increased by 45bps from 1.6% to 2.1%. Looking forward, given continued robust demand for high quality space, prime stock vacancy in particular is expected to remain low for the foreseeable future. This view is supported by high pre-commitment on new builds and the continuing trend of a ‘flight-to-quality’. Any weakness in demand is expected to primarily impact secondary stock as occupiers look to move into new or better stock.
The most notable completion during 2H20 was the much anticipated 94,000 sqm Foodstuff Distribution Centre at The Landing Business Park. As a result of this and other completions in the submarket, we recorded growth in industrial stock in the Auckland's south industrial precincts of 179,898 sqm to reach 5,293,349 sqm overall over 2H20. Further notable developments currently underway in the submarket include the NZ Post Processing Centre (35,000 sqm) at the Logos Logistic Estate as well as the 20,500 sqm new build at 72 Tidal Road for Sorted Logistics.
In 4Q20 we observed a slight uplift in both prime and secondary rental rates to $168 psm and $134 psm respectively. The trophy transaction of 4Q20 was the $188 million acquisition of 259 James Fletcher Drive, Manukau by LOGOS and global institutional investor, GIC, from Toll Group at a passing yield of 3.45%. The acquisition of the 17.2-hectare land parcel is intended to serve as the seed property for a planned development with an estimated value of $250 million.