Supply Pipeline

Construction in the industrial markets will remain steady in 2023 with a number of new builds close to completion or about to start coming out of the ground, with a total floor area of 52,135sqm in the currently surveyed suburbs.

At the same time, there are a number of large development projects also progressing in emerging industrial locations that are not yet part of the monitored areas, such as Tainui’s Ruakura Industrial Hub where three developments have already completed last year (for Peter Baker Transport and Waitomo Fuels). Projects underway at Ruakura include Kmart Distribution Centre of 42,000sqm (approx.), Big Chill of 13,000sqm (approx.) and Maersk of 19,000sqm (approx.). A multi-unit development is planned on Riverlea Road to the south end of Hamilton City, this will total 1,609sqm spread across 17 units.

Industrial land supply in Te Rapa remains under pressure with the majority of the northern precinct already sold for development and occupation, the remaining land in the southern precinct being retained by Chalmers Properties for design build options.

Eyes now clearly look at the options available at Northgate, Horotiu just north of Te Rapa, with new options also opening up at Hamilton Airport. Prospective occupiers looking further afield can also consider land at Hautapu, Cambridge.

The potential of land becoming available in Hamilton still exists though, with work continuing to rezone land in Te Rapa North - that is currently held for future industrial growth - for active industrial use.

Demand

The industrial market remained reasonably active in 2022, with a total net absorption growth of about 50,600sqm. As Figure 3 shows, the majority of this growth was recorded in Grade A, mostly representing the occupied new supply in Te Rapa North and at the Airport. About half of the total Grade A net absorption growth took place in Te Rapa North.

Key contributors to the positive Grade A net absorption include Tyre Line, Normans Transport and Pro Mechanical, all relocating to their newly completed facilities in Te Rapa North and at the Airport. Frankton was the only district to experience a negative Grade A net absorption (-2,800sqm), mostly attributed to Ikon Commercial vacating 12-14 Charlies Way. The Ikon building accounted for approximately one third of the available space.

Grade B net absorption was also positive, although to a lesser degree (8,700sqm), enabled by moderate take-up activity in Te Rapa North, Frankton and at the Airport, in addition to a sizeable expansion by NZ Post at 12-16 Earthmover Crescent, where the company took up half of the recently completed 7,050sqm warehouse.

Lower quality secondary grade buildings in Grade C and D experienced minimal change in net absorption, with a combined growth of 1,430sqm.