#cheap property to rent
New Zealand industrial buildings cheap to rent
It is about 80 per cent cheaper to rent space in an industrial warehouse in New Zealand than in Heathrow, London.
Industrial warehouses in New Zealand are among the cheapest in the world to rent.
A survey by Colliers International shows industrial rentals in the country’s three main centres – Auckland, Christchurch and Wellington – are about 80 per cent cheaper than the world’s most expensive city.
Heathrow, in London, is the most expensive city in the world to rent prime industrial warehouse space, with Hong Kong a close second.
It costs $375 per square metre to rent in Heathrow, while it costs just $111 per sqm to rent in Auckland, $103 per sqm in Christchurch and $83 per sqm in Wellington.
Across the ditch, Sydney was ranked 15th most expensive city to rent industrial warehouse space at $162 per sqm.
However, despite high global rankings, the majority of the top 10 most expensive cities experienced rent declines over the past year.
Only Honolulu and Hong Kong experienced rental gains.
The survey, based on data from 146 cities around the world over the last 12 months, said despite a boost in New Zealand’s industrial sector from tenant demand outweighing supply, a large global gap still existed.
The industrial sector was the first to emerge from the recovery after the global financial crisis – recently passing its last cyclical peak across many indicators, it said
Robust property fundamentals had aided investor confidence in the sector.
“We predict this will be a driving factor for even more capital value increases in the medium term,” Colliers said.
“Although the number of offshore buyers of commercial property has increased over the past year, the majority of activity has been for flagship office premises and regional shopping centres across New Zealand.”
Vacancy rates had reduced significantly in New Zealand, with Auckland, Christchurch and Wellington experiencing declining vacancy rates over the past year to record lows.
However, yields for New Zealand’s industrial investors are among the strongest in the world.
The average industrial prime yield rate for the top rental cities is 5.9 per cent. This compares with Auckland on 6.6 per cent, Christchurch on 7.6 per cent and Wellington on 8.2 per cent.
“Our firm yield rates are an indication of the strong demand and competitive bidding for industrial property in New Zealand when compared globally,” Colliers said.
Capital values had increased steadily in New Zealand’s three main cities, as a result of rising rents and firming yields, it said.