Reading between the rail lines

New Zealand boasts 4,000 kilometres of freight and passenger rail corridors, according to government data. What's more, every year $5 billion is spent upgrading and maintaining existing assets, as well as building new transport infrastructure

These projects are of great significance when anticipating New Zealand's future commercial property hotspots, as new public transport and rail lines have the potential to transform and revitalise entire areas. Purchase an investment nearby an ongoing major transport project before it's done, and that asset could be worth far more once it's completed. 

 

The City Rail Link route in Auckland

Slated for completion in 2023, the City Rail Link is New Zealand's largest ever infrastructure project, worth an estimated $3.4 billion. It comprises 3.45 km long twin tunnels, built at up to 42 metres underground. The line includes a redeveloped Mt Eden station, as well as two new underground stations on Karangahape Road and one on Wellesley Street.  

This will extend rail transport throughout the city, as well as linking Mt Eden to the Northwest rail line. These new routes have the potential to spur growth in areas like Pitt Street and Mercury Lane and to further support already thriving centres such as Karangahape Road, Britomart and Victoria Road. 

Mercury Lane in particular could offer an opportunity. The underused street sits just off Karangahape Road, and is currently occupied by an old food court, alongside low-grade retail and hospitality stock. Commercial investors should keep an eye on this region and Mt Eden over 2018, as property here has great potential thanks to the City Rail Link's plans. 

 

Light rail in Auckland

Large swaths of Auckland are under serviced by public transport, with rail in particular lacking in the city's suburbs. The Labour Government has lasered in on this issue, pledging to improve light rail in the city. 

Completion of the city to Mt Roskill line, and city to airport link have been promised within four years, and 10 years respectively. The Labour Government is still in its infancy so there are scant details on the projects, however, they certainly have the potential to spur growth in newly connected areas. In fact, research from the Journal of Real Estate Finance and Economics found that commercial property within a quarter mile of rail links was worth 16.4 per cent more on average than those outside that zone. 

Investors should look closely at Dominion Road and Mt Roskill as potential commercial property investment growth locations in NZ when details of Labour's plans start to materialise. Retail properties around new rail stops in particular could notice a surge in tenant demand, capital values and rents. 

 

Rail lines


Regional rail linking Auckland, Tauranga and Hamilton 

The ever-ambitious Labour Government also plans to link three of the North Island's biggest economies - Auckland, Tauranga and Hamilton - via one passenger rail line. Again the details haven't been made public yet, however, the significance of this project and its potential to tap into previously underused areas means it's worth monitoring for commercial investors. 

Finding the NZ commercial property investment locations of the future can be challenging, but by keeping one eye on infrastructure projects, and the other on suburb level markets, investors can get ahead of the curb. To start your property search look to realestate.co.nz - the country's largest collection of online property listings. 
 

You Might Also Like

Calculating return on investment

An important aspect for an investor to consider is the rate of return a rental property will provide...

Subdividing your investment property

When weighing up the potential of an investment property, it is important to look at the opportunity...

Is Wellington the best place to invest in commercial property?

At the end of 2016, the Kaikoura and Wellington regions were struck by a 7.8 magnitude quake. As a r...