North West Industrial Market Snapshot Q1 2019
The North-West region is becoming increasingly attractive to occupiers and developers due to its infrastructure growth and availability of green-field land.
With the overall Auckland industrial vacancy rate reaching a new record low of 1.5% in 2H18, the North-West region is becoming increasingly attractive to occupiers and developers due to its infrastructure growth and availability of green-field land in comparison to alternative industrial precincts. The North-West overall is one of the fastest growing areas in New Zealand. An estimated 40,000 new homes are needed by 2050 to accommodate forecast growth. In late 2018, the government announced a further $339m investment to support major infrastructure projects in Whenuapai and Redhills, with the capital expected to enable the building of around 7,000 new homes in the area. Other major infrastructure projects include the proposed western $2.3b light rail project, which is yet to commence.
The development pipeline across Auckland is under-pressure generally, due to scarcity of land, increasing land costs and rising development costs. The North-West currently has ~44,000 sqm under construction, contributing 15% of the total development pipeline in the Auckland Region. Construction remains focused within Hobsonville and Westgate due to their locational advantage.
Recently completed developments in the North-West include a 10,780 sqm facility for National Mini Storage at 108 Hobsonville Road and stage 2 of the Northside Business Park in Westgate.
Hobsonville and Westgate land is now selling for more than $600 per sqm, with some land parcels reaching $700 per sqm. Kumeu land values are lower in comparison given the limited available purchase options as land is tightly held by landowners. In comparison, the Auckland Region land value currently sits within the range of $350 - $675 per sqm, with an average of $517 per sqm.
*North-West Industrial refers to the Westgate, Hobsonville and Kumeu precinct.