Vacancy rate remains at 2.4% for H2 2024

• Vacancy rate remained at 2.4% for H2 2024. On a precinct basis, vacancy rates stand at 2.3% (-40 bps since Q2) for Auckland City, at 2.8% for Manukau (unchanged since Q2), at 1.3% for North Shore (+40 bps since Q2) and at 3.4% for North-West (+190 bps since Q2).
• In the medium- to long-term, the Auckland regional vacancy rate is expected to remain at or near 3%, highlighting ongoing demand and supply imbalances. A recent rise in sublease space will assist some occupiers in the short-term.

Several large-scale projects under construction across the City and South precincts

• There are a considerable number of projects under development, with approximately 441,000 sqm of additional warehouse space expected to be delivered across the region between 2024 and 2028.
• A 3.5 ha Neilson Street development in Onehunga, with an expected value of over NZD 100 million, will be the largest industrial build for NZX-listed Argosy Property when completed in late 2025. The development comprises two warehouses, 5,000 sqm and 11,500 sqm in size.

Rent growth moderates

• Prime and Secondary average net warehouse rents stand at NZD 193 per sqm p.a. and at NZD 158 per sqm p.a., respectively.
• Average Prime and Secondary net yields have remained stable since Q3 2023. There have been a small number of larger transactions of NZD 60 million and over, a number of NZD 10 million to NZD 30 million sales, and rise in the number of sub-NZD 10 million sales.

Outlook: Better conditions will result in tighter market fundamentals

• Vacant and sublease space continues to offer opportunities for occupiers, which will reduce as economic activity picks up during 2025. Rent growth rates will increase as space availability decreases.
• The anticipated decrease and stabilisation of interest rates will bolster investment sales activity and help to firm yields throughout 2025.