COMMERCIAL PROPERTY UPDATE

We’re almost halfway through the year and the commercial property market outlook for the rest of the year is looking increasingly positive.

Despite the expected slowdown of activity in some areas of the commercial property market due to interest rate increases, the lack of appetite by banks to lend on commercial investment and the impending general election, experts predict that by late 2023 business will be back on track with the market expected to experience a sustained level of demand and activity across all sectors.

We have found that with construction costs continuing to elevate, and capital not so freely available, developers are finding it difficult to build quality buildings at a price that enables them to be sold or leased at a rate that is profitable. Either building costs need to decrease and/or rent rates increase to allow developers to come back into the market and down the track into 2024 we expect to see demand exceeding supply in the industrial building market. Enquiry level is increasing on office space, as it is on quality warehouse leases, and we are receiving a lot of enquiries from owner occupiers wanting to invest in commercial industrial property. These buyers understand that a quality asset will protect their long-term investment, and assets that display stability with good cost controls will always continue to perform.

The ongoing infrastructure investment in roading, arterial routes and development projects has proven to be a major benefit to the commercial property

Information sourced from REINZ as at 17th July 2023 market in North Canterbury. This has enhanced the connectivity and accessibility of the Waimakariri region underpinning it’s continued growth in popularity as a desirable location for key businesses in storage, supply chain, modern warehousing, and logistics. The upside of this is an increase in the attractiveness of commercial properties located in these areas which will drive demand and rental yields, providing confidence and strength to the commercial market.

Prime locations such as Rangiora township with high foot traffic are in high demand as they provide solid investment returns. Recent investment in the upgrading of buildings and facilities from both the private sector and the WDC, is continuing to allow the Rangiora township to offer a unique and vibrant boutique retail experience. The recent extensive upgrading of Good Street with new office/business and retail tenancies becoming available later in the year, will continue to bring opportunities for landlords and investors who own quality retail properties in strategic locations.

All signs show that the North Canterbury commercial property market is well positioned for growth and with demand increasing across key sectors, investors and landlords can expect to find attractive opportunities in the years ahead.

If now is the right time for you to invest in commercial property, connect with a Harcourts Four Seasons Commercial Consultant today.