Business Land Shortage in Auckland #UnitaryPlan

Concerns over business land availability in Auckland


This one has been known for a while and while more industrial land is being made available (Wiri, Takanini and Drury South) businesses are still highly concerned about the lack of land for business purposed in Auckland.


From the NZ Herald:

Industrial space shortage sends firms to search afar

5:00 AM Wednesday April 6, 2016/ Colin Taylor

Lack of Auckland prime space is forcing industrial companies to look further afield to meet their larger footprint space needs, says CBRE’s latestAuckland Industrial Marketview Snapshot.

The agency’s research shows that Auckland industrial space available for lease has been continuously decreasing in the last two years with prime industrial vacancy now sitting at a miniscule 0.6 per cent.

Zoltan Moricz, senior director of New Zealand Research for CBRE, says the shortage means industrial occupiers are facing limited options in terms of the number of industrial premises and their overall size.

“This is despite a healthy supply pipeline, which added more than 300,000sq m of new space to the market over the last 18 months,” Moricz says.

“These additions didn’t create more options for occupiers because about 80 per cent of the new supply is design-built, pre-committed development and, in many cases the new buildings are catering for business expansion rather than relocation and therefore occupiers don’t leave backfill space behind.”

Commenting on the research results, Claus Brewer, CBRE’s national director of industrial and logistics,says Auckland’s industrial investment and occupier market is becoming increasingly cramped and large format users are looking further afield than Manukau.

“This year we can expect to see continued interest in Auckland’s traditional industrial locations, such as the Auckland Airport corridor, the central corridor, Takanini and Wiri areas.

“However, we will see industrial investors and occupiers looking even further out at Drury and Pokeno. We also anticipate Hamilton and Tauranga will experience strong growth.”

Brewer says industrial occupiers need to appreciate that the property market is very different than it was five years ago.

“For businesses looking at the possibility of moving, it’s important to consider their options at least two years from expiry,” Brewer says.

Moricz says that, for a second consecutive year, take up of secondary quality industrial space in Auckland has been higher in East Tamaki and Wiri than in Mt Wellington and Penrose.

Over 56 per cent of the secondary take-up took place in East Tamaki and Wiri, with less than 17 per cent in Mt Wellington and Penrose.


He says reasons behind the increase in B-grade quality demand in East Tamaki and Wiri include:

  1. The lack of readily available prime quality properties, pushing occupiers towards lower quality buildings in order to accommodate their business expansions.
  2. Logistics companies taking up around 75,000sq m of secondary grade space in 2015 in addition to occupying more than 100,000sq m of prime quality space.
  3. Available secondary grade stock is materially different in East Tamaki and Wiri than in Mt Wellington and Penrose. “Although the latter two suburbs are seen as suitable locations in general, the ‘functional obsolescence’ of a substantial part of the vacant stock orients occupiers towards suburbs where available options are better in quality and more functional.”


“Most of the new industrial developments in recent years took place in East Tamaki, Wiri and in the Mangere Airport area. These areas are increasingly seen as the new industrial centres where major occupiers expand and relocate to. This has clearly lifted their appeal contributing to the fast take-up of many available secondary grade options.”


Source and full article:


The situation in Wiri and East Tamaki will become more acute as land prices in the Penrose-Onehunga-Mt Wellington industrial complex continue to rise forcing industry users to decamp that area and move into those South Auckland areas where land will become even more acute within the next 10 years.

That said wider Southern Auckland ( soincluding Drury and Takanini) can take the heavy industrial load for a while longer, we will need to expand our rail spur connections into those complexes if we are to make to most of shifting goods between rail and truck to mitigate against even more trucks clogging the Southern Motorway. But will the Government see to this? Nope not with their blinkered vision that is for sure.


While industrial land is short commercial land in South Auckland will be short as well by 2026 (end of the Unitary Plan in its current form from September this year). As debated with the Unitary Plan Panel in Manukau ON Manukau yesterday (AMP Capital also did also the same on Monday) the Manukau Metropolitan Centre modelling done by Council is going to come short on current population growth projections for the South (Big Submitter to #UnitaryPlan Rezoning Shows Manukau’s Future). While expanding the Manukau Metropolitan Centre zone is one thing allowing developers to go straight up beyond 18 storeys (current Metro Zone limits) will be another as agglomeration affects start kicking in for Manukau. The Super Metropolitan Centre zone allows developments to go beyond 18 storeys (as the SMC allows for unlimited height) meaning you can get large and small format retail on the first three floors, office in the next say seven then residential (including hotel/short stay accommodation) beyond that. M Central in Manukau demonstrates a mixed residential and retail use tower.


Given Manukau is also going to be the largest Metropolitan Centre (whether it goes to Super rating or not) and services the largest catchment of all the Metropolitan Centres in Auckland I wager two things:

  1. Growth in Manukau will outstrip Council’s modelling for demand and supply by 2026
  2. At least one 25 storey tower and something like an IKEA type retailer in Manukau City Centre by 2026


Interesting times ahead especially with Panuku Development Auckland due to give their master plan for Manukau next week to the Auckland Development Committee.


Manukau Metro comparison Source:
Manukau Metro comparison