Hutt Valley projects spur supply shortage
A warehouse on Pharazyn St is one of the few industrial properties for sale to owner-occupiers looking in Lower Hutt.
The vacancy rate for industrial property is below 3 per cent in the Wellington region, compared with 9 per cent in 2012, according to Colliers International research.
The 69 Pharazyn St property sits across the street from houses to be bought by the Greater Wellington Regional Council for the Hutt River Floodplain Management project.
Colliers salesman Ben Taylor said about 30 properties on Pharazyn and Marsden streets would be bought and demolished to make way for larger stopbanks.
The two-level building is divided into three self-contained tenancies, including an occupied upstairs office and a showroom and warehouse on the ground floor, both unoccupied.
The property’s rateable value in September 2016 was $1.8 million, according to QV.
Colliers salesman Tim Julian said there was a ‘‘frustrating’’ lack of available industrial space and development land in the Wellington region.
Julian said he had been told by several property owners who would be displaced by the river expansion work that they wanted to remain in the western part of the Petone, Melling, and Alicetown areas.
‘‘When properties get notices delivered to them to leave … there’s going to be a lot of competition for a very limited pool of vacant buildings,’’ he said.
‘‘We’ve been surprised that more of the tenants affected by the flood acquisition activity and also the New Zealand Transport Agency-affected properties for the Petone-Grenada [link road] on Corner St have not come to market more. When it does happen it will be quite a rush.’’
Julian said he had never seen supply in industrial property and development land this low.
Normally he would show
‘‘When properties get notices delivered to them to leave … there’s going to be a lot of competition for a very limited pool of vacant buildings.’’ Tim Julian, Colliers International
buyers four to eight industrial properties, but now shows buyers fewer than three, and sometimes there were none available.
More businesses would close, move to smaller premises, or move to Upper Hutt, and rents could spike, he said.
Businesses were reluctant to move to Upper Hutt where there were few vacancies, although there was vacant land, Julian said.
Lower Hutt councillor Ken Laban, who is also deputy chairman of the Hutt Valley Flood Management subcommittee, said affected property owners had been notified.
‘‘As you can imagine, people are in varying degrees of acceptance,’’ Laban said.
He said the physical and emotional upheaval of moving was not an easy situation for anybody to be in, but the council had to weigh that against the advice from scientists and experts on how to keep people safe from floods.
Council flood protection manager Graeme Campbell said purchases were being made on a ‘‘willing buyer, willing seller’’ basis. He said it was well in advance of when the council needed the properties. However, because of the uncertainty it created, the council wanted to allow those people the opportunity to sell their property now.
‘‘Anybody who needs to sell their property, or wants to sell their property now, we’ll offer to buy them.’’
Campbell said the council had bought seven properties, and was negotiating another 30. ‘‘We’d like to have all of those properties purchased by about 2019.’’
He said construction on the stopbank could take 10 years.
Julian said the New Zealand Transport Agency was not yet prepared to buy properties on PitoOne Rd and Cornish St, putting affected property owners ‘‘in quite an invidious position’’.
Some of the affected buildings in the area have to fulfil earthquake strengthening requirements by 2018.
Julian said he knew of an owner-occupier who had proceeded with $100,000 worth of earthquake strengthening plans that were required by 2018, even though he knew the building is almost certainly going to be compulsorily acquired within the next two years for the PetoneGrenada link road.
It was uncertain whether the cost of the strengthening work would be recouped if the building was sold to NZTA, Julian said.