Industrial land a rarity in tight Wellington market

A large industrial development site next to Kenepuru Hospital, Porirua, has been placed on the market through Colliers International.

The site, making up 1.9ha of prime freehold land at 8 Hospital Drive, is being marketed by Colliers industrial brokers Kieran Lennon and Tim Julian. It is offered for sale by expressions of interest closing on March 7.

With few options to purchase well-located industrial land in Wellington, the site is expected to be sought after among developers and owner occupiers, says Lennon.

“This is a prime site right next to the hospital, in an area that is set to benefit from transport improvements. The new on and off ramp to State Highway 1 on the new Transmission Gully route will be just 650m from the property,” he says. 

With the site due to be titled around September 2018, the purchaser can secure a contract over the site but not settle until that date, says Julian.

“The lead-in time while the title is issued gives the buyer plenty of time to make their development plans ahead of settlement. By the time the site is titled, it will be ready to go, with services provided to the boundary and a load-bearing platform installed for construction.”

The site will be filled and engineered under the supervision of Calibre Consulting to provide a load-bearing, level platform, with a capacity of between 50kpa and 100kpa suitable for an industrial building, Julian says.

The opportunity to construct a new industrial facility in a market where vacancy rates are very low is also expected to appeal to developers, Julian says. 

“Colliers’ latest research showed Wellington industrial vacancy has reduced to a record low of 2.9 per cent. This is the lowest vacancy rate in the industrial market for a generation, and is resulting in strong rental and value growth.”

There is now less than 100,000sq m of industrial space available in Wellington – well below the 9 per cent vacancy recorded in late 2012, says Lennon. 

“Industrial property has been taken up quickly over the past few years, to the extent that there are now very few options available for businesses looking to move. This is due to stronger tenant demand and practically no new supply, along with a reduction in the number of industrial buildings in the market.”

The supply of industrial space had become more restricted owing to a combination of factors. These included some industrial properties being converted to retail use; new infrastructure projects getting underway and the shortage of well located land preventing developers from being able to construct buildings where tenants want them, Julian adds.

The site occupies a high profile corner location on the corner of Hospital Drive and Raiha St, with two road access points. It is located in the Kenepuru/Elsdon industrial area, which was established in the 1960s and is home to occupiers including Bunnings, Whittakers, Bidvest and Online Security.

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