“Avalanche Of Cash” Going To Go Into Commercial Property

Industrial property rents are rising but prices are rising faster – pushing yields down – as an avalanche of money decends on a tight market

May 04, 2015 – 12:58pm, Greg Niness



Auckland’s industrial property market is starting to mirror its residential property market, with a shortage of stock and property prices rising faster than rents, forcing investor yields down – while Wellington is attracting out of town investors and supply is catching up with demand in Christchurch, according to Colliers International.

Colliers’ latest industrial market report says that rising rents and yield-hungry investors competing for a limited number of properties are a feature of the industrial property market (warehouses, factories and the like) throughout the country.

“The main centres of Auckland, Wellington and Christchurch keep hitting new highs across most indicators, with provincial cities also reporting solid demand,” the report says.

In Auckland the overall industrial vacancy rate ranged from 0.9% in the airport precinct to 3.7% in Penrose/Onehunga, while rental yields ranged from 6.1%-7.35% for prime grade properties to 6.75%-8.85% for secondary grade premises.

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