Rents have risen around 15 per cent this year, particularly in strong locations close to consumers. Photo / Richard Robinson
Rents have risen around 15 per cent this year, particularly in strong locations close to consumers. Photo / Richard Robinson
Opinion
OPINION:
Auckland Industrial warehousing and logistics property are experiencing unprecedented demand with the vacancy of prime industrial just 0.1 per cent of total stock. The latest stats suggest there are only four small buildings vacant across Auckland.
There is more demand than supply and we are building a record levelof new developments with work in progress in excess of $400 million — we would typically be $100m-$150m.
Rents have risen around 15 per cent this year, particularly in strong locations close to consumers. Factors driving demand are the continued rise in digitisation and e-commerce, the desire to hold greater levels of stock and customers building more resilience in their supply chains.
This is the strongest level of customer demand I have seen and we are spending a lot of time with customers focused on improving the efficiency of their facilities — to assist with rising costs. This includes building upgrades to improve environmental performance, with initiatives such as automated LED lighting and solar energy systems.
On the investment side, we remain cautious as we are going through a re-pricing period with interest rates rising. In our sector, however, strong rental growth is largely offsetting the expansion of yields at this stage. We have a low level of debt and will remain cautious in pricing new opportunities, given high uncertainty both locally and around the world.
