Wellington’s industrial vacancy rate reached 1.5 per cent, representing just under 39,000sqm of space. This is the lowest result recorded since the annual survey was commenced a decade ago.
New industrial supply has been constrained by a shortage of available and suitable land for development. New builds are still predominantly owner occupiers.
Major infrastructure development such as Transmission Gully is a significant catalyst to the upswing in demand across the wider Wellington region.
Low vacancy and strong tenant demand will continue to put upward pressure on rents. Yields will continue to firm through 2019 due to the lack of available stock for sale.
Sales activity is buoyant, but restricted by the number of options available. Provisional sales data for 2018 shows there were 155 industrial transactions, equating to nearly $182.7 million.
Colliers International investor confidence survey showed a net positive (optimists minus pessimists) 47 per cent of respondents expected investment decisions to improve in Wellington’s industrial sector as a result of low vacancy rates, rising rents and firming yields.