Newsletter May 2023 - NAI Harcourts Hamilton

COMMERCIAL ASSETS

Hamilton

Waikato Market Commentary

BUILDING ENERGY EFFICIENCY RATINGS - NABERS

There has been increasing interest and Tenant requirements around building efficiency in recent years, particularly from government and corporate occupiers. We started with Green Star, which from a Hamilton perspective was often a costly exercise where Tenants were rarely prepared to pay the associated rental freight for the rating, to the more attainable NABERS rating system.

NABERSNZ (New Zealand version of NABERSNational Australian Built Environment Rating System) and Green Star are two sustainability rating systems used in Australia and New Zealand to measure the environmental performance of commercial buildings. While both rating systems aim to promote sustainable buildings, they differ in their approach and focus.

NABERS Ratings:

NABERS is a performance-based rating system that measures the energy efficiency, water usage, and waste management of existing commercial buildings. It was developed in Australia in 1998 and has since been adopted in New Zealand as well. NABERS ratings are based on actual building performance data, which is collected over a period of 12 months and benchmarked against other buildings.

The NABERS rating system is designed to assess the environmental impact of buildings, primarily focused on measuring their operational energy efficiency, such as how much energy is used for heating, cooling, lighting, and hot water systems. On a scale of 0 to 6 stars, a 6-star rating represents marketleading environmental performance, while a 0-star rating indicates that the building has a high environmental impact. NABERS ratings are used to benchmark building performance and provide the building owners with recommendations for improvement.

There are 3 types of NABERSNZ ratings – Base Building, Tenancy or Whole Building, which measures a combination of both Base Building and Tenancy ratings.

Green Star Ratings:

Green Star is a comprehensive rating system that evaluates the environmental design and construction of new buildings, as well as major refurbishments. It was developed by the Green Building Council of Australia in 2003 and has since been adopted in New Zealand as well. The Green Star rating system assesses a building’s environmental impact in nine categories, including energy, water, materials, and indoor environment quality.

Green Star ratings are based on a points system, with a building needing to achieve a certain number of points in each category to attain a rating. Green Star ratings range from 1 to 6 stars, with a 6-star rating representing world leadership in sustainable building design and construction.

Benefits of NABERS in New Zealand:

NABERSNZ has several benefits for building owners and occupants in New Zealand. Firstly, NABERSNZ ratings provide building owners with an understanding of their building’s energy and water usage and waste management performance. This information can be used to identify areas of improvement and implement energy-saving measures, which can lead to cost savings on energy bills.

Secondly, NABERSNZ ratings can increase the value of a building. A higher NABERS rating indicates that a building has lower environmental impact and is therefore more attractive to potential tenants and investors.

Thirdly, NABERSNZ ratings can improve the indoor environment quality of a building. This is because buildings with high NABERS ratings are more likely to have features such as efficient lighting and air conditioning systems, which can improve the comfort and health of occupants.

Lastly, NABERSNZ ratings can help to reduce greenhouse gas emissions in New Zealand. Buildings account for a significant proportion of greenhouse gas emissions in New Zealand, and improving the environmental performance of buildings can help to reduce these emissions and mitigate the impacts of climate change.

In conclusion, NABERS and Green Star are two rating systems used in Australia and New Zealand to measure the environmental

performance of buildings. While both rating systems aim to promote sustainable buildings, they differ in their approach and focus. NABERS is a performance-based rating system that measures the energy efficiency, water usage, and waste management of existing buildings, while Green Star evaluates the environmental design and construction of new buildings and major refurbishments.

NABERS ratings appear more realistically attainable than Green Star, particularly for owners of existing commercial buildings, therefore providing a valuable tool for improving the environmental performance of buildings and increasingly seen as a means of demonstrating environmental responsibility and compliance with regulations. The significant benefits for building owners and occupants in New Zealand, include cost savings on energy bills, increased building value, improved indoor environment quality, and reduced greenhouse gas emissions.

For more information - www.nabersnz.govt.nz

Inside this issue

Industrial Leading the Way Page 2 What to Think About When Entering a Lease Agreement Page 3

Property Opportunities

COMMERCIAL ASSETS Waikato Market Commentary

Expansive Profile

431 STATE HIGHWAY 1C, CAMBRIDGE ROAD, RIVERLEA, HAMILTON

• Exceptional profile with 280m (approx.) road frontage

• Land and buildings only – vacant possession offered

• Land area of 7,891sqm (more or less) 650sqm (approx.) floor area

• Recognised auto dismantling site

Borders are indicative only

Auction: 11am, Wednesday 31st May 2023, 678 Victoria Street, Hamilton CBD (unless sold prior)

Industrial Still Leading the Way

Despite the economic headwinds, the Hamilton industrial market continued to experience strong developer and occupier activity in 2022. Completed new supply amounted to over 56,000 sqm, and although overall vacancy increased somewhat, it was driven more by yet to be tenanted new supply, than any significant occupancy loss.

Industrial vacancy did increase from 0.9% at the end of 2021 to 1.2% in December last year, representing less than 25,000sqm of physically vacant and available space, with almost two thirds of this vacant stock located in Frankton.

The most noticeable change in vacancy was recorded in Te Rapa North where vacancy increased from 0.2% to 1.0% in the twelve months to December 2022. The single biggest contributor to this increase was the completion of a large warehouse at 12-16 Earthmover Crescent, half of which remained untenanted at the end of 2022.

The healthy supply pipeline, especially in Te Rapa North and Hamilton Airport and now the additional areas of Ruakura Industrial Hub, Northgate at Horotiu and Hautapu in Cambridge are testament to developer and investor confidence, underpinned by continued above average economic performance of Hamilton where GDP growth was 4.1% in 2022.

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.

The growth in Hamilton’s industrial sector and continued low vacancy (now four years running below 2% vacancy) has seen pressure on rental growth with new building warehouse rentals growing by some 10% to 15%. Part of the increase is due to higher land costs, materials and construction cost increases and in a number of cases more than one party offering to lease the same space.

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). Improving transportation networks (including the now open Eastern State Highway linkage around Hamilton) and the high economic importance of the ‘golden triangle’ of Auckland, Hamilton and Tauranga continue to keep focus on this region as a strong central location and to take advantage of connections to the rest of New Zealand.

• First time offered for sale in over 40 years Inspections recommended

Brad Chibnall 021 448 989 brad.chibnall@naiharcourts.co.nz

Aircraft Hangar

HANGAR 1, INGRAM ROAD, HAMILTON

• One 182sqm ‘Future Steel Hangar’ building available (Roadside Hangar)

• Concrete floor with large door entry at both ends

• Security coded direct access into fenced airport grounds which are patrolled by Hamilton Airport security

• Storage for up to 4 small planes

Borders are indicative only

Auction: 11am, Wednesday 31st May 2023, 678 Victoria Street, Hamilton CBD (unless sold prior)

Theo de Leeuw 027 490 3248 theo.deleeuw@naiharcourts.co.nz

• This is a must see for storage, where affordability might be part of your concerns

Sean Stephens 027 478 1669 sean.stephens@naiharcourts.co.nz

Ready to Occupy

UNIT 10, 280C PEAKE ROAD, CAMBRIDGE

• Total floor area of 100sqm (approx.)

• Clearspan high stud warehouse, part of a 13 unit complex

• Large roller door with canopy

• Drive around site for easy manoeuvrability Part of a brand new 13 unit complex

• Popular industrial precinct close to Waikato Expressway on/off ramps

• Hautapu, Cambridge is a growth industrial precinct

Auction: 11am, Wednesday 31st May 2023, 678 Victoria Street, Hamilton CBD (unless sold prior)

Theo de Leeuw 027 490 3248 theo.deleeuw@naiharcourts.co.nz

Vacant possession

Sean Stephens 027 478 1669 sean.stephens@naiharcourts.co.nz

Frankton Industrial Opportunity

23 LAKE ROAD, FRANKTON, HAMILTON

• 964sqm freehold property with modern versatile industrial building

• Floor area of 170sqm (approx.)

• Fully security fenced and gated

• Owner occupiers and investors should enquire

• Holding income of $60,000pa plus GST until October 2023

Auction: 11am, Wednesday 31st May 2023, 678 Victoria Street, Hamilton CBD (unless sold prior)

Theo de Leeuw 027 490 3248 theo.deleeuw@naiharcourts.co.nz

• Central location in handy Frankton, with easy access to the Hamilton CBD an arterial routes

Mike Neale 027 451 5133 mike.neale@naiharcourts.co.nz

Theo de Leeuw 027 490 3248 theo.deleeuw@naiharcourts.co.nz

Prime Location

UNIT 2, 27 NORTON RD, FRANKTON, HAMILTON

• Big branding opportunity with arterial exposure on Norton Road

• Floor area of 184sqm (approx.)

• High stud roller door access to the rear warehouse area of 34sqm (approx.)

First floor office with mezzanine storage

• Dual access

• 3 car parks

Vacant possession

What to Think About When Entering a Lease Agreement

Auction: 11am, Wednesday 31st May 2023, 678 Victoria Street, Hamilton CBD (unless sold prior)

Theo de Leeuw 027 490 3248 theo.deleeuw@naiharcourts.co.nz

Boundaries are indicative only

Nicky Allardice 021 264 2144 nicky.allardice@naiharcourts.co.nz

Affordable Industrial

43 COLOMBO STREET, FRANKTON, HAMILTON

• A project with huge potential

• Warehouse building of 575sqm (approx.) including amenities

• Freehold land area of 1,012sqm (more or less)

• Multi functional space, suitable for workshop, storage, light industrial, clubs or nonprofit and fitness groups

Borders are indicative only

Auction: 11am, Wednesday 31st May 2023, 678 Victoria Street, Hamilton CBD (unless sold prior)

Nicky Allardice 021 264 2144 nicky.allardice@naiharcourts.co.nz

• Excellent branding opportunity in the heart of Frankton industrial Vacant possession

• In close proximity to Hamilton CBD

Theo de Leeuw 027 490 3248 theo.deleeuw@naiharcourts.co.nz

Upside Opportunities Abound

5 HILL STREET, HAMILTON CBD

• Freehold title of 1,012sqm (more or less)

• Total floor area of 813sqm (approx.)

• 18 on-site car parks

• Returning only $105,167pa plus GST net Additional upside from recently vacated 191sqm office suite

• A Grade Seismic

Auction: 11am, Wednesday 31st May 2023, 678 Victoria Street, Hamilton CBD (unless sold prior)

Ra Piripi 021 838 887 ra.piripi@naiharcourts.co.nz

• Ideal for those seeking a high yielding return or mixed use conversion within the Central City, City Living Precinct Genuine vendor selling after 25 years

Mike Neale 027 451 5133 mike.neale@naiharcourts.co.nz

Could NAI Harcourts Property Management add value for you?

Whether it be just facilities management or full property management, we have the expertise, knowledge and systems to also assist you with:

• Strategic planning for your property Compliance with all regulatory requirements

• Leasing management & property inspections

• All repairs and maintenance

• Management, monitoring & negotiating service contracts

• Annual budgets, rent collection & debtor control

• Property accounting services

• Body Corporate management

• Statutory compliance and insurance

Our management fees are often included as part of

Commercial property landlords live and die by the lease agreements they negotiate with tenants. It may be bread and butter work for landlords, but leases also require great effort to ensure they’re well-planned and fairly drawn-up.

And while it is often tenants who are warned to use caution when entering into a new lease agreement, as to avoid being written into a corner they don’t want to be in, landlords too, must take great care when negotiating the rules of tenancy or else risk future expense and conflict down the road.

Guarantee

Obtain a guarantee that the tenant is a good position to stay true to their financial obligations.

Such a guarantee can be obtained through background checks and a comprehensive vetting process.

Balance terms and renewals

It is understandably tempting for landlords to write tenants into the longest possible lease agreements - the longer the tenancy, the less the landlord has to worry about finding new tenants, the less a property risks sitting empty.

However, landlords need to think closely about the length of tenancy and consider what implications it may have for their future interests. If, for example, the property is going to need structural maintenance at some point soon, having a tenant locked into a long contract might impede this. This could result in the landlord having to pay compensation to the tenant or delay important work. It is worth writing a clause into all lease agreements which allows the landlord to terminate the tenancy, with appropriate notice or compensation, if urgent redevelopment tasks require it.

Act Quickly

A landlord can go to great measures to try and avoid any of the potential risks that come with a lease agreement, but sometimes, things can still go wrong. When that happens, it’s important to act

If, for example, a tenant misses a rent payment or breaches the terms of the lease, react straight away and contact the tenant directly to identify the cause of the problem. Prompt action ensures the issue isn’t given time to worsen and acts to inform the tenant that you, the landlord, will not easily overlook such breaches of

Greg Wills

the operating expenses for a commercial property and therefore are recoverable from the tenants. We can take the day to day responsibility away from the client by managing the entire process and freeing up the owner’s time to concentrate on other opportunities.

If you would like to discuss how we can help with any of your property management requirements, please contact:

Greg Wills at NAI Harcourts Hamilton. greg.wills@naiharcourts.co.nz M: 021 896 585

Planning the perfect time for a rent review is essential for commercial landlords. Too short a period between reviews could act to frustrate the tenant, too long and the landlord risks making less rental income that they should be in an upward market. Should you have any questions, feel free to contact any of our specialist agents to get an update on the market trends when it

RECENT SUCCESS

Hamilton

In Excess of $13 Million Worth of Transactions (1 Feb. 2023 - 30 April 2023)

• Suite B, Level 1, 341 Victoria Street, Hamilton

• Unit 2, 28 Mahana Road, Te Rapa, Hamilton

• Unit 6, 180 Ossie James Drive, Rukuhia, Hamilton

• Unit 4, 1370 Arthur Porter Drive, Te Rapa, Hamilton

• Part 1st Floor, 62 Church Road, Te Rapa, Hamilton

• Unit 1, 141 Ossie James Drive, Rukuhia, Hamilton

• Southern Ground Floor, 260 Victoria Street, Hamilton CBD

• Shop 10, Rototuna Shopping Centre, Rototuna, Hamilton

• Part 2A Norton Road, Frankton, Hamilton

• Units 2 & 3, 219 Collingwood Street, Hamilton CBD

• 11 Earthmover Crescent, Te Rapa, Hamilton

• 11D Garden Place, Hamilton CBD

• Unit 2, 4 Gordonton Road, Chartwell, Hamilton

• Level 3, 28 Harwood Street, Hamilton CBD

• 142 Great South Road, Ngaruawahia

• North Ground Floor, 260 Victoria Street, Hamilton CBD

• 39 Ellis Street, Frankton, Hamilton

• Unit 14, 42B John Spencer Way, Rukuhia, Hamilton

• Unit 2G, Building 1, Horsham Downs Rd, Rototuna, Hamilton

• 787 Victoria Street, Hamilton CBD

• Part 575 Te Rapa Road, Te Rapa, Hamilton

Kara Gerrand 021 527 211 CBD & Fringe CBD

Mike Neale 027 451 5133 CBD & Fringe CBD

Brad Martin 027 889 3018 CBD & Fringe CBD

Ra Piripi 021 838 887 CBD & Fringe CBD

Theo de Leeuw 027 490 3248 Frankton

Sean Stephens 027 478 1669 Te Rapa East

Nicky Allardice 021 264 2144 Te Rapa West

Aaron Donaldson 027 755 7522 Industrial

Brad Chibnall 021 448 989 Suburban East

Jay Kaushal 021 777 291 Suburban West Greg

021 896 585

INGRAM ROAD, RUKUHIA, HAMILTON

MANIAPOTO STREET, OTOROHANGA

THE BOULEVARD, TE RAPA, HAMILTON

COMMERCE STREET, FRANKTON, HAMILTON

MAHANA ROAD, TE RAPA, HAMILTON 8-10 CHARLIES WAY, FRANKTON, HAMILTON

THE BOULEVARD, TE RAPA, HAMILTON

PEMBROKE STREET, HAMILTON LAKE