FIGURES | HAMILTON INDUSTRIAL | 2024
Hamilton industrial market overview
SUMMARY
Monitored industrial building stock in Hamilton reached 2,155,000 sqm, following 34,000 sqm of new supply reaching completion in the twelve months to December 2024.
Industrial vacancy has been stable in 2024 at 1.6%, representing over 28,000 sqm of physically vacant and available space. Te Rapa South and Airport area had more vacant space. While vacant space in Te Rapa North kept largely stable, Frankton’s total vacant space dropped by nearly 50% or 10,000 sqm in 2024.
Net absorption was positive by around 28,000 sqm over the survey period, largely due to the completion of new and occupied Grade A buildings in Te Rapa North. Frankton’s Grade C submarket had over 9,000 sqm of net absorption which is the main reason of vacancy drop in the precinct.
Around 27,500 sqm of new industrial supply is under construction across ten projects in the monitored Hamilton precincts, close to the 2024 total new supply.
27,500 sqm
Net New Supply
1.6%
Vacancy
28,000 sqm
Net Absorption
16,000 sqm
Under Construction Pipeline
New Supply
Across the four major Hamilton industrial suburbs of North and South Te Rapa, Frankton and Airport, over 28,000 sqm of new supply was completed by the end of 2024, bringing the total monitored stock size to 2,155,000 sqm. As Figure 1 shows, most of the new supply was completed in Te Rapa North. Only one new building was completed at Hamilton Airport.
The most significant new completion in 2024 was the 6,121 sqm new facility at 10 Earthmover Crescent in Te Rapa North leased by Omtenco NZ. Overall, Te Rapa North had an addition of 33,554 sqm of new stock, more than 26,000 sqm of new supply recorded in this precinct during 2023. Other notable Te Rapa North developments include the 3,900 sqm building leased by RML at 6 Chafer Place, the 2,942 sqm building by Fliway Transport at 24 Earthmover Crescent and the 1,673 sqm building by Extec at 33 Norman Hayward Place.
In contrast, the Airport precinct, which had over 60,000 sqm of new supply in the last two years, only had one new building at 143 Ingram Road for Aurora Agencies.
FIGURE 1: Hamilton industrial stock and new supply by suburb
FIGURE 2: Hamilton industrial stock sizes by grade and suburb
Te Rapa North Te Rapa South Frankton Airport
Te Rapa North Te Rapa South Frankton Airport Grand Total
FIGURE 3: The new RML Building at Te Rapa Gateway
Supply Pipeline
Construction in the industrial markets slowed in 2024 and will continue this trend in 2025.
Compared to 57,700 sqm of new supply in 2023, the total new supply in 2024 was only 28,000 sqm, and will be slightly more in 2025. Figure 4 shows all new developments in the four monitored suburbs and Ruakura, equivalent 27,500 sqm of new supply expected in 2025. The two biggest new developments are Asmuss at the Airport precincts and Tainui Warehouse units at Ruakura, both approximately 5,000sqm each.
Industrial land supply in Te Rapa remains under pressure with only three sites available for owner occupation in Te Rapa North. The remaining land in Te Rapa Gateway southern precinct is retained by Chalmers Properties for design build lease options; of which there is approximately 7 ha.
The potential of land becoming available in Hamilton in the short term continues with work to rezone land currently zoned for future industrial growth in Te Rapa North. New industrial sections facing the Waikato Expressway with access from Onion Road are close to the Te Rapa interchange. The land being subdivided is approximately 20 ha and will come available for construction in 2026. In addition, subdivision of Industrial land continues on Powells Road, Ruakura North, new freehold titles for the 13 ha subdivision are due mid 2025.
New industrial sections will come available over the next ten years at Hamilton Airport. Having gained consent for subdivision for industrial purposes, the 100ha block will be subdivided in stages, work on stage 1 having already commenced.
In the last few years, many large new developments have been completed in Ruakura. However, construction activity in this area whilst low through the survey period is planned to increase in 2025 and 2026. Two new developments are being built in Ruakura for Sime Darby (truck dealership) and large format warehouse units (five 1000sqm
units) for Tainui Group.
Demand
The industrial leasing market remained active in 2024 with overall positive net absorption of 28,000 sqm in the market, although it was not as strong as in 2023, when total net absorption was over 48,000 sqm. As Figure 5 shows, most of this growth was recorded in Grade A, representing occupied new buildings in Te Rapa North. Although there was one small new building in the Airport precinct, more Grade A vacancies in this area resulted in negative absorption of 3,400 sqm.
The Frankton Grade C submarket was the second most active market in Hamilton in 2024, with over 9,000 sqm of net absorption. Regal Aluminium, Parshva Tile & Bath Bliss and Singh Sweets, each provided over 3,600 sqm of vacancy take up in this submarket to mention a few.
Grade B net absorption in both Te Rapa North and Frankton increased slightly, while it decreased by more than 1,000 sqm in Te Rapa South. Grade C net absorption in both Te Rapa North and South were negative.
Absorption rates for Hamilton have been impacted by an increased availability of smaller industrial units. Soft economic conditions have forced smaller entrepreneurs to retain their existing premises or retract their businesses where possible back to their residential addresses.
FIGURE 5: Hamilton industrial net absorption 2024
Te Rapa North Te Rapa South Frankton Airport Grand Total
Vacancy
Hamilton’s industrial vacancy remained stable at 1.6% at the end of 2024, although it varies in different suburbs, grades and building type with an extensive availability of small industrial units ranging in size from 76 sqm to 135 sqm approximately. Total vacant space was 34,000 sqm as of the end of 2024.
Airport had the highest vacancy rate increase in 2024, mainly due to 11 Lochiel Road. TOMRA vacated this 5,100 sqm Grade A building in 2024 now committed to Wade Group from mid 2025.
Vacancy rate in Te Rapa South increased by 0.7%, or 4,400 sqm, partially due to some over 1,000 sqm new vacancies on Tasman Road.
Vacancy decreased significantly in Frankton. Vacancy take ups in Grade C was the main reason.
Te Rapa North’s vacancy only increased by 724 sqm, and the vacancy rate kept at 1.2%. Prime profile locations remained popular.
In terms of quality, Grade A vacancy rate had an increase from 0.8% to 1.4%.
Grade B vacancy rate decreased by only 0.1%, while Grade C decreased by 1.1%. Grade D has no vacancies by the end of 2024.
The overall market has been less active in 2024. Of the 34,000 sqm vacant space, over 16,000 sqm or nearly half of the total vacant space have been vacated since 2023 or over 12 months of vacancy duration.
FIGURE 6: Hamilton industrial vacancy by suburb
FIGURE 7: Hamilton industrial vacancy by quality
Te Rapa North Te Rapa South Frankton Airport Grand Total
Vacancy Dec 23 Vacancy Dec 24
Conclusions and outlook
Developer activity during 2024 slowed down given softer market demand. Less new supply also prevented vacancy from increasing significantly. Total vacancy increased by around 700 sqm resulting in a stable vacancy rate of 1.6% compared to December 2023.
Softer economic conditions are weighing on the future development/supply pipeline. Our 2024 survey shows approximately 27,500 sqm of planned industrial project, slightly more to that for the last year’s total new supply.
The growth in Hamilton's industrial sector and continued low vacancy (now six years running below 2% vacancy) has kept rents at a stable level under the challenging economic environment. Given the lower amount of new supply this year, we still don’t expect vacancy will increase to 2% or above. The expected economic recovery in H2 is likely to improve the leasing market and help vacancy keep at the lower level.
The intensive land take-up around the Waikato Region provides occupiers with choice, either Te Rapa, Northgate at Horotiu, Hamilton Airport, Ruakura or Hautapu (Cambridge). Improved transportation networks, particularly the opening of the Inland Logistics and Container Park at Tainui's Ruakura Industrial precinct, and the economic importance of the 'golden triangle' of Auckland, Hamilton, and Tauranga, continue to make this region a strong central location, well-positioned to take advantage of its connections to the rest of New Zealand.
Contact
Theo de Leeuw
Director – Industrial Sales & Leasing
M: 027 490 3248
E: theo.deleeuw@naiharcourts.co.nz
Sean Stephens
Industrial Sales & Leasing
M: 027 478 1669
E: sean.stephens@naiharcourts.co.nz
Jonathan de Leeuw
Industrial Sales & Leasing
M: 027 444 6074
E: jonathan.deleeuw@naiharcourts.co.nz
Zoltan Moricz
Executive Director - Research
P: 09 359 5399
M: 021 595 399
E: zoltan.moricz@cbre.co.nz