Where to invest in industrial property?

It’s always critical to do your research if you are choosing to invest in industrial property – or any type of property for that matter. Remember the golden rule when it comes to property of ‘Location, location, location’.

Different cities will have different levels of activity and infrastructure spending which may or may not support the sector. Additionally, macro-economic trends can also impact on your investment’s short and long term returns.

The current larger economic and social themes include the eCommerce boom, the renewed logistics sector focus, which are impacting on the need for centrally located industrial properties.

All of these factors should be taken into consideration when deciding where to invest in industrial real estate.

Auckland

According to the most recent Colliers report, Auckland is the most active industrial market in the country, approximately accounting for one-third of the sales in recent years¹. Auckland’s industrial leasing market has shown resilience in the face of extended periods of trading restrictions. The overall vacancy rate is projected to have fallen in the six months to August 2021 to 1.9%, from 2.2%².

With leasing options becoming harder to find, pressure is building particular around the prime end of the industrial market. This is evident in the increased interest in the industrial sector, specifically in the Waikato, Bay of Plenty and Canterbury regions, which are largely limited in sales activity by the number of properties being released to market.

1 “Auckland Industrial Report | Second Half 2021”; Colliers, December 2021
2 “Commercial and industrial sales likely topped $12B in 2021”; Colliers, January 2022