Strong fundamentals driving Hawke’s Bay growth
The latest Hawke’s Bay commercial and industrial insights and data report from Bayleys shows sustained demand for quality assets, yields remaining stable, upwards pressure on rents in the industrial arena, and renewed optimism with international tourism returning to the region.
Bayleys Hawke’s Bay commercial manager Kerry Geange said the report supported the heightened activity being seen in the commercial and industrial market, with increased enquiry and investment from outside the region evidence that its soughtafter fundamentals carry weight.
‘‘Hawke’s Bay property has traditionally been tightly-held by intergenerational owners and there is a shortage of stock coming to the market as owners opt to hold and watch as the postCovid economy unfolds,’’ he said.
Geange said any property that did come to the market garnered solid interest from North Island buyers as well as from local investors and owner-occupier.
‘‘Well-located, high specification property with good tenant covenants sells very well and quickly, and there is currently a lot of capital in the market looking for opportunity in the commercial and industrial space.’’
Benchmark yields for modern commercial and industrial property sat in the 4.9% to 5.7% range, he said.
Geange said that in-line with the rest of the country, Hawke’s Bay was witnessing a flight-toquality for office buildings, led largely by national tenant occupiers, with benchmark net face rents for modern city centre offices in the $330 to $360 per square metre range.
‘‘Councils in both Napier and Hastings are driving transformative change in the CBD areas with improved streetscapes, amenities and community facilities which adds another layer of appeal for investors, owner-occupiers and tenants.’’
The strength of the regional economy, which continued to be underpinned by the primary sector, was giving investors the confidence to commit to Hawke’s Bay, Geange said.
The horticulture sector remained a core part of the region’s economic well-being, despite pandemic-related workforce and supply challenges, he said.
‘‘New planting regimes have significantly increased production which in turn is flowing on into the coolstore and packing shed parts of the property mix with new development in the Twyford, Fernhill and Whatatu areas.’’
Industrial occupiers were now gravitating more towards Awatoto, Irongate, and Omahu Rd, while Hawke’s Bay Airport was proposing an industrial business park development on airport land.
The gentrification of the formerly industrial Ahuriri area continued with a greater presence of office occupiers interspersed within a vibrant hospitality precinct.
‘‘The council is working on its broader inner harbour revitalisation plan for that area, and Mackersey Development’s new West Quay project will feature restaurants, bars and retail at street level with serviced apartments and luxury apartment living above.’’
Geange said population growth in the bay was providing stimulus to construction and retail sectors, and the aged care and retirement living sector is flourishing on the back of the region’s demographics.
‘‘The region hit a population over 160,000 in the past couple of years, and 200,000 is looking likely in the not too distant future.
‘‘That starts to be a critical mass of population which will feed the service and construction industries and support the service sector.’’
‘‘The strength of the regional economy, which continues to be underpinned by the primary sector, is giving investors the confidence to commit to Hawke’s Bay,’’
Bayleys Hawke’s Bay commercial manager Kerry Geange.