Evidence of record-breaking industrial land prices in Tauranga’s Tauriko Business Estate is growing as demand soars and supply dwindles, according to brokers active in the area.
Simon Clark, Managing Director at Colliers Tauranga, notes the appetite from a wide range of buyer groups to secure land at Tauriko has been quite remarkable, elevating the demand for the limited amount of supply whilst resetting price expectations.
“We have seen significant land value growth in industrial land at Tauriko Business Estate over the last six to 12 months.
“Properties were selling at $500 per sq m which quickly went to $600 per sq m, and in the last few weeks, we have seen several significant sales of industrial land tip well into the $700 per sq m range for the first time.
“The ability to reach these new record prices has been driven by soaring demand from investors, developers and owner occupiers who are starved of land purchase opportunities in the very tightly held Tauranga industrial market.
“Recently we sold 18 Whakakake Street, which is a relatively regular shaped, flat industrial lot of some 3,924 sq m that was marketed for sale by deadline private treaty in June.
“We received five offers from owner occupiers and developers, eventually selling the property for a record $730 per sq m.
“Following on from this sale, a recent listing at 55 Kaweroa Drive, which was a very similar sized and shaped lot, comprising approximately 3,935 sq m, sold for just under $715 per sq m.
“The purchaser was one of the buyers from the previous campaign,” says Clark.
“In the same week, a larger, fully fenced but rear lot at 120 Whakakake Street of some 7,500 sq m recently sold for $625 per sq m,” says Clark.
Despite the record prices being achieved, Clark notes that the attractiveness of the area with the ease of access and amenities on offer as well as the quantum of demand for sites in a low interest rate environment is likely to see prices rise further.
“Tauriko Business Estate is situated in a prime location in Tauranga, with a wide range of retail options at Tauranga Crossing on its doorstep, and the Tauranga CBD less than 10 km drive away via the expressway. Easy access to the wider ‘Golden Triangle’ region via the state highway network is also on offer.
“Further, all of the future stages of the Tauriko Business Estate have been fully sold out and we are unlikely to see any new stages released in the next few years.
“With industrial property vacancy rates at record lows coupled with a stronger than expected economic recovery, the appetite from developers and owner occupiers to secure land for new premises will continue,” says Clark.