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Industrial vacancy in Auckland has shown another sharp decline, reducing to 5.2% overall from 6.6% in August 2010, and 7.1% February 2010. Factors contributing to the reduction are modest rise in demand combined with virtually no uncommitted supply. The reduction was reasonably consistent across Auckland with eight of the ten monitored precincts falling, only New Lynn and Mairangi Bay increased.

As usual the prime sector is in better shape than secondary market, with prime market vacancy only 3.6%. Six months ago it was 4.0%. Detailed results appear on page two. Land values continue to stabilise and have in general shown a modest bounce-back following perhaps an initial correction. However they are still 25-40% below their peaks.

Manufacturing output continues to record small gains but a flatter than expected economic outlook is likely to inhibit recovery in the industrial sector in terms of short term rental and capital value gains. There is there however, in a generic sense, currently more resilience than the office or retail sectors, and is unlikely to suffer further declines of any substance in the short term.

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