Industrial investment hotspots in NZ

Industrial property is a favourite among many investors, thanks to its relatively low levels of vacancies, and the high-quality tenants it so often attracts. What's more, it's generally affordable, with an average national price of just $560,169, according to realestate.co.nz data. 

Despite its many advantages, it can be a difficult market to fully understand, and investors often only look to their local cities when buying. To reveal the many opportunities nationwide, let's look at the numbers, and how each industrial investment location in New Zealand compares. 
 

The fundamentals of industrial property investment

Risk of vacancy has to be one of the main concerns when purchasing industrial property as an investment. To overcome this, investors must choose an industrial property that has all of the essentials for potential tenant, such as:  

●    Proximity and access to transport infrastructure.
●    Access to well-appointed local amenities.
●    Solid employment and a thriving local economy.
●    Future plans for development in the area.

Due to their size, and the industries that operate within them Auckland, Wellington, Christchurch and Tauranga are often considered the country’s best industrial investment locations. 

 

 

Auckland commercial property investment

When it comes to industrial property investment in New Zealand, Auckland has the obvious advantage. Statistics NZ data shows the city makes up 37.2 per cent of the country's economy, with a GDP of $93.5 billion last year. Plus, with New Zealand's biggest population, and busiest international airport, its advantages as an investment location are impressive. 

Areas outside of the city centre, such as Albany, also feature thriving industrial property markets, albeit at a slightly higher price than those out south. 

When it comes to industrial property investment in New Zealand, Auckland has the obvious advantage.

Unfortunately, the high value of land in Auckland means you'll pay a premium to invest here. The average asking price is $2.89 million, or $2,782 per sqm. Despite that fact, there was over 188,000 square metres of industrial property for sale in the city as of June, meaning if you search for it, you may find something affordable. 

 

 

Investing around New Zealand

As you go into smaller centres, the risk of vacancies can tend to increase. Canterbury, for example, has a smaller pool of prospective tenants for whatever property you purchase, and as a result a higher risk of vacancies.

However, thanks to the lower cost of land in the area you'll pay far less to invest here. The average asking price is just $1,317,676, or $1,206 per sqm, less than half that of Auckland's.

What's also important is that there's promise of growth in the area. Christchurch's GDP increased by 31.6 per cent from 2011 to 2016, proving that the region has a bright future. 

Wellington is similar to Christchurch in regard to its economy's size and the cost of its industrial space. The average asking price in the area is $1,430,306, or a very affordable $1,088 per sqm, realestate.co.nz figures show. Also interesting is the average area of properties sold here - 1,314 sqm, far larger than Auckland's 1,040 sqm. These larger spaces have the potential to attract well-known, quality tenants, who often tend to lease bigger property. Wellington may present a unique opportunity for lower level investors to purchase such an asset.

Last of all, when it comes to investing in industrial property in New Zealand's regions, Tauranga should be considered. The Bay of Plenty's economy is small, with a GDP of only $13.1 billion, however, the presence of New Zealand's largest port here makes it a unique proposition for investors. Up to 22 million tonnes of imports and exports pass through the port a year, all of which creates a need for industrial space and warehousing. 

Properties are very affordable here, with an asking price of only $881,436 on average, or $1,233 per sqm. However, due to the Tauranga economy's heavy reliance on the port, you need to ensure that whatever space you purchase is ideal for industries working in the area. 

If you're looking to purchase property away from your home city, take time to understand the area, and thoroughly research the properties available. When you're ready to go, the best place to start your search is always realestate.co.nz.