Hamilton vacancy rates at unprecedented level

Property vacancy remains extremely low across all of Hamilton’s major industrial areas, according to Bayleys sales agent Alex ten Hove.

‘‘Significant land holdings in the area are hard to come by under such tight conditions,’’ he said.

‘‘Well-located industrial property will continue to be sought after. Any properties that are centrally located and which tap into transport arterial [routes] to optimise efficiencies will be hotly contested in the leasing market.’’

The squeeze is on existing industrial stock. Traditional industrial areas are experiencing unprecedented low vacancy rates, making it hard for businesses to get a foothold in popular locations.

Population growth continued to underpin Hamilton’s commercial property market, and the industrial market has been the major beneficiary so far, ten Hove said.

The most sought-after properties were prime assets in prominent locations that had long weighted average lease terms with strong covenants.

‘‘But with such opportunities becoming harder to find or obtain, investors are increasingly pursuing well-located industrial properties that have vacant possession or short-term lease expiry profiles as they represent an opportunity to add value.’’

Demand for industrial space, from all buyer groups and tenants, was strong, driven by limited supply.

With current industrial vacancies tight, rent for betterquality space in Hamilton was expected to show further upside over the next 12 months.

A significant landholding, however, is up for sale in Hamilton’s central industrial precinct.

The vacant 1.12-hectare freehold property, at 205b Ellis St in Frankton, is sited on flat, underdeveloped land.

It comprises 1250 square metres of buildings, including a modern high-stud warehouse, and is being offered as a sale with vacant possession.

The property was suitable for owner-occupiers but also investors and developers who were looking to capitalise on the city’s booming industrial property market, ten Hove said.

The property comprises 207sqm of office space, a 37.95sqm mezzanine lunchroom, a 115.17sqm mezzanine space for open storage, a 19sqm store, a 905sqm workshop or warehouse and a 125.28sqm secondary building workshop.

It was previously used for recycling heavy products and comes with a fully concreted yard, storage areas and a weigh station.

The property’s proximity to Hamilton’s CBD and access points to State Highway 1 and KiwiRail’s main trunk railway line bolstered its potential for development, ten Hove said.

Neighbouring tenants were a mixture of established logistics, manufacturing and storage businesses, which included Mainline Sheetmetals, Pro-Form Plastics, Weldwell New Zealand, Fletcher Easysteel, Complete Engineering and Hydraulics, and Fastway Couriers.

Ten Hove expected potential buyers would have little difficulty leasing the property, which had a capital valuation of $2.82 million.