Companies seek high quality Auckland sites
A STRONGER economy has made manufacturing companies hungry for high-quality premises in Auckland, pushing demand almost beyond supply.
Research by CBRE shows that while manufacturers are looking for less space, stringent quality standards are driving their need to secure the best quality premises they can find.
So far the market has been able to supply enough new industrial properties to supply all its needs, with about 204,400 square metres of industrial space under development at 29 sites in Auckland, particularly in East Tamaki, the airport and Mt Wellington.
However, Tim Boyle, associate director for CBRE’s South Auckland office, said that while there was a good amount of development under way, much of that was precommitted.
‘‘We are also seeing reducing vacancy, driven largely by a lack of ample future supply. It is of course a positive sign that there is over 200,000sqm in development, but there’s a need for more new facilities in the medium to long term.’’
Greg Goldfinch, national industrial manager at Colliers International, agreed, and said the shortage was not restricted to manufacturing sites.
‘‘We’re certainly at a point where vacancy rates we don’t believe have been this low.
‘‘We’re working with a number of companies who are struggling to find industrial space currently, especially when they’re looking for good quality, modern warehousing space.’’
This was why some large commercial landlords including Auckland Airport were starting to build on spec again, he said.
‘‘There’s a real shortage right across the board and we are seeing what we call B and C-grade space getting backfilled now.’’
Gergely Gaspardy, research manager at CBRE New Zealand, said that out of all sectors, manufacturing and logistics companies in the Auckland region were the most active takers of industrial space, followed by the retail sector, and all of them liked good quality.
‘‘Of note is the fact that 53 per cent of space taken up by the manufacturing sector is Grade A, premium quality space . . . so the sector has clear demand for relatively new, high spec, good quality property across Auckland,’’ he said.
For some, quality was less of an issue. The wholesaling industry took secondary grade space for about two thirds of its needs.
‘‘But the export and manufacturing sector have far more exacting standards when it comes to their property requirements,’’ Gaspardy said.
Boyle said the demand for premium premises was being driven in large part by the stringent standards required for food products.
‘‘Consider the standard of space