Greater balance in Christchurch industrial sector

Greater balance in Christchurch industrial sector

Colliers International’s latest half-yearly Christchurch industrial research report released.

Christchurch’s industrial sector is recalibrating to a more balanced demand and supply profile, as construction activity dips slightly and local businesses expand and absorb existing space.

That’s according to Colliers International’s latest half-yearly Christchurch industrial research report, released this week.

Chris Dibble, Director of Research and Communications at Colliers, says stronger market fundamentals continue to underpin the city’s industrial sector.

“Key to this has been the ongoing recalibration of the sector. We’ve seen a more balanced demand and supply profile predominantly due to local businesses expanding and absorbing existing space.”

Dibble says that in addition, a slight reduction in construction activity is assisting.

The total amount of new industrial space to be issued a building consent has dropped from a recent cyclical high of around 326,000sq m in the year to September 2016, to 219,000sq m in the year to September 2019.

“Given the more positive market dynamics and low interest rate environment, investor activity remains strong,” Dibble says.

“Prime average yields firmed 33 basis points between the third quarters of 2018 and 2019. Secondary average yields firmed a further 21 basis points.

“Steady rents and sharpening yields have influenced average prime capital values to rise by 3.1 per cent in the past year. Secondary capital values are up 3.6 per cent.”

Investor confidence remains high, with Colliers International’s latest quarterly survey putting Christchurch at a net positive (optimists minus pessimists) score of 21 per cent. This is up from a net positive 16 per cent in Q3 2018.

Sam Staite, Industrial Director at Colliers International’s Christchurch office, says industrial vacancy is at a near record low.

“As such we predict the increase in the demand for land and the construction of new builds will continue.

“Our highly capitalised local market will continue to seek quality property and with limited supply we believe further tightening of investment cap rates is highly likely.

“Secondary investment cap rates will stay steady, however tenant demand for lesser quality properties will remain soft with the potential for downward pressure on C- and D-grade rental rates."


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Chris Dibble

National Director | Colliers Partnerships, Research & Communications

Auckland CBD

My Colliers Partnership priorities focus on support initiatives that drive collaboration, best practice learning, cost efficiencies and growth opportunities across the wider Colliers International New Zealand franchise network. I also oversee the collaboration and delivery of award-winning research reports and communications for Colliers. With over 13 years of experience and university qualifications in economics, geography, marketing and property. I have a multi-disciplinary approach that assists a broad range of clients and internal stakeholders. I am a regular presenter and market commentator, often discussing the latest insights on current and future property trends. I also work with in-house and external writers to curate an audience-focused content delivery strategy for Colliers.

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Sam Staite

Director of Industrial

Christchurch (Agency)

Sam is the leading industrial broker in the South Island and is the Director of the Industrial Sales & Leasing division for the Colliers Christchurch office. He has negotiated the majority of the South Islands largest industrial transactions during the past 11 years and in the past 4 years alone has delivered in excess of $480 million in sales.

Sam works closely with his colleagues across the AU/NZ Colliers network which ensures the Christchurch commercial market and his clients are as widely connected as possible. Sam works with corporate and private clients who benefit from his in-depth knowledge of the industrial sector, his proactive approach and strong business networks.

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