Christchurch industrial
market snapshot 2Q20

August 05, 2020

Christchurch's industrial vacancy rates have seen a noticeable overall decline, as all sub-precincts experience reduced vacancy to varying degrees. Demand for industrial space remains elevated, as investor interest in acquiring industrial assets continues to strengthen further in 2Q20. With greater uncertainty in the wake of COVID-19, demand for quality, prime stock has further exacerbated. Despite greater reductions to secondary stock vacancies, investor preferences clearly remain predominately in prime assets.


Consistent with trends over the past two years, Christchurch's total stockbase continues to expand at a progressively slower pace with a minimal addition of 430 sqm in 1H20. Projects continue to trickle through the pipeline, with ~48,000 sqm of developments on the horizon. One of the larger-scale projects due for completion in 2H20 of the Waterloo Business Park development, is set to inject ~2,804 sqm to the total stock. Despite this, the effects of COVID-19 have begun to permeate through, as many completion dates on construction have started to push back.

Asset performance

Prime yields have proceeded on a downward trajectory over the past 12 months and have reached an all-time low average of 5.95%, with a slight expansion in the yield range. While secondary yields have sotened in the last quarter, they have returned to the same average (7.13%) and range as observed in 3Q and 4Q19. Investor appetite for prime assets continues to grow over 2Q20 despite COVID-19, given the budding potential of the city's industrial sector. However, this only serves to widen the gap between prime and secondary stock.

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