Supply chain continuity and the positive impact of inflation are driving demand – and yields – for industrial property on Auckland’s North Shore.
As New Zealand progress further down the track of operating in a Covid-disrupted commercial environment, the importance of supply chain continuity is becoming ever more prevalent – particularly with its implications in the industrial property sector, and the role the sector has to play in how businesses adapt and respond.
Both domestic and international supply chains are creaking under the strain of goods delivery. Shipping reliability of stock and product to New Zealand is running at less than half it was a year ago. Domestically, logistics and freight forwarding firms are challenged with maintaining their delivery schedules while having to operate with employees self-isolating for stand down periods.
Bayleys North Shore General Manager Jayson Hayde, and Bayleys sales and leasing agents Matt Mimmack and Laurie Burt, said that throughout the past two-and-a-half-years of functioning in a Covid environment, demand for industrial property on Auckland’s North Shore had remained consistent – ramping up further since the Omicron variant came into focus at the beginning of the year.
“With product supply chain issues now impacting on many sectors of the economy, we are receiving enquiries from many businesses seeking bigger warehousing premises to hold more stock to underpin their supply continuity plans,” said Hayde.
In response over recent months, Bayleys North Shore has negotiated multiple lease renewals in medium to large industrial properties in the area. These have included:
243-247 Bush Road in Albany – tenanted by a dental products importing and manufacturing firm occupying some 3,152-square metres of warehousing and office space
16C Piermark Drive in Albany – tenanted by a foodservice firm supplying New Zealand supermarkets, occupying some 946-square metres of warehousing and office space
23F William Pickering Drive in Albany – tenanted by a large electrical services firm operating in both the commercial and residential sectors, occupying some 1,707-square metres of warehousing and office space
28 Tarndale Grove in Albany – tenanted by plastics and electronics importing company occupying some 992-square metres of high stud warehousing and office space
Unit A, 344 Rosedale Road in Albany – which will be tenanted later this year by a bakery which has expanded its operations, and will be occupying some 822-square metres of high stud warehousing and office space
228 Bush Road in Albany – tenanted by an engineering and electronics importing company which has amalgamated three companies into one, occupying some 1,140-square metres of high stud warehousing and office space
Unit B, 237 Bush Road in Albany – tenanted by a local louvre firm utilising the premises as secondary storage for its existing operations, occupying some 1,001-square metres of modern high stud warehousing and office space; and
15 Orbit Drive in Albany – tenanted by a manufacturing firm utilising the premises as overflow storage for its existing operations, occupying some 2,392-square metres of modern high stud warehousing and office space.
Meanwhile, Burt said that the sharp rise in inflation over the past nine months had delivered a positive impact for many industrial property landlords – who had seen tenant rents increasing as a consequence.
“With the consumer price index clocking in at 7.3 percent in July for the second 2022 quarter, landlords with properties whose lease rates are tied to the consumer price index (CPI) are broadly smiling,” Mimmack said.
