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Colliers Essentials | Christchurch Industrial Report | 2H 2021

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  • Demand for industrial workspace across the Canterbury region has held at high levels, driven by growth within the logistics, manufacturing and wholesale trade sectors. Leasing options remain limited, particularly for high quality premises. 
  • The development sector remains active, albeit having slowed from the peak levels witnessed between 2013 and 2016. Over the year to September 2021, building consents were issued for the construction of 189,020 sqm of new industrial workspace, up slightly on the figure recorded in 2020, but behind the 10-year average of 231,475 sqm. 
     
  • Land value appreciation accelerated in recent months with prime land commanding up to $375 per sqm, up from approximately $300 per sqm at the start of the year. The increase in values reflects a tightening of land supply, with localised shortages arising for the first time in many years, potentially a factor in the slowdown in development activity.
     
  • Rental rates have remained stable with prime grade warehouse space commanding $100-$120 per sqm and offices between $220 – $250 per sqm. Upward pressure on rentals is anticipated over the year ahead due to the combination of tight market conditions, increased building costs and inflation.

  • Investment activity is constrained only by a lack of product being brought to market. Prime yields have tightened again over the last year with sales generally reflecting a yield of between 4.5%-5%, sharper for smaller premises. Local investors are increasingly having to compete with out of region investors who see Christchurch located property as offering excellent investment fundamentals.

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Colliers Essentials | Christchurch Industrial Report | 2H 2021

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