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Auckland Industrial Report |Second Half 2023

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  • Despite the elevated level of development apparent in recent years, vacancy rates have held at historically low levels. The overall vacancy was recorded at 1.8% in August 2023, the same rate as that recorded a year earlier. Challenging economic conditions are likely to lead to an easing of tenant demand in 2024. Leasing opportunities are also increasing via sub lease options. While increases in vacancy rates can be expected they will be limited given the lack of uncommitted supply.
  • Development intentions remain positive as illustrated by building consent issuance. In the year to September construction of an additional 414,440 sqm of industrial floorspace was approved. Although a decrease from the peak level of 540,190 sqm recorded in the 12 months to November 2022, the latest figure still surpasses the 10-year average of 349,020 sqm. The development sector continues to be driven by design build projects with, for example, Goodman Property Trust reporting that its development pipeline is 93% pre-leased.
  • Rents have continued to trend upwards over the course of 2023 albeit at a more moderate rate than that seen in 2022. Average prime grade warehouse net face rents advanced by approximately 9.5% to sit at $189 per sqm as of September 2023. The rate of rental increase is likely to cool further over 2024 as tenant demand eases and businesses find it increasingly difficult to pass on additional costs given the pressure on household budgets.
  • Higher interest rates, a recalibration of yields and a cooling economy have contributed to a slowing in sales activity over the last 18 months. Syndicators and REITs have withdrawn from the market leaving owner occupiers and private investors as key players. Sound occupier fundamentals and the stabilisation of interest rates, however, are likely to underpin an increase in investment activity in 2024.
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Auckland Industrial Report |Second Half 2023

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Related Experts

Greg Goldfinch

National Director | Industrial

Auckland South

Greg specialises in the mid to upper end of the Industrial sale and leasing markets. He joined Colliers International in 2004, coming from a policing background. He quickly established strong relationships within the industrial market and has worked exclusively for the likes of Fisher & Paykel, The Warehouse, Freedom Furniture, Fletchers, NZ Police, NZ Guardian Trust, Goodyear Dunlop NZ Ltd and Mercedes-Benz to name a few.

Greg has been the lead broker on nearly all of the largest transactions in the industrial property market over the last ten years. Greg has completed three of the largest industrial sales ever in the New Zealand market. He is a regular top 10 broker for Colliers across NZ having transacted in excess of $6billion worth of industrial real estate in his time with Colliers.

In 2013, 2019 and 2020 Greg was awarded the Commercial and Industrial Salesperson of the Year Award by the Real Estate Institute of New Zealand and was runner up in 2018. Greg was Colliers International’s top salesperson in New Zealand across all sectors in In 2010, 2013, 2017, 2018, 2019 and 2020.

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Ian Little

Associate Director | Research

Auckland CBD

My Colliers priorities focus on supporting the New Zealand network through the provision of research and thought leadership reports, articles and presentations. I draw on over 30 years of experience in the property market, gained in both the UK and New Zealand to my role enabling me to assist a broad range of clients and internal stakeholders. I am a member of the Royal Institution of Chartered surveyors. I am a regular presenter on current market conditions and future trends to the media, clients and various interest groups.

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Filip Ograbek

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As a Research Analyst, Filip is responsible for the undertaking of market research across the commercial and residential sectors to aid in the preparation of Colliers market-leading reports. He is responsible for the maintenance and development of core research databases, utilising these databases to provide analytical support to the organisation both internally and externally. Filip is a current student  undertaking  a Bachelor of Property, allowing him to bring a wealth of theoretical knowledge to his role. 

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