What commercial property in Auckland is in hot demand?

Siobahn Brown : 15th Sep 2017
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There is plenty of commercial property available in Auckland if investors and businesses know where to look. In Q2 2017, realestate.co.nz data shows there were 421,276 square metres (sqm) of commercial real estate listed for sale in the City of Sails, with 2,343,363 sqm available for lease.

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Please note the yield assumes 100% full occupancy and does not include any outgoings such as rates and insurance.

Among these figures, there are some interesting trends in terms of both how much space is listed, and how much vendors want buyers and tenants to pay for it. Where is the demand focused?

Retail property in Auckland

For Q2 2017, there was 130,641 sqm of retail property available for lease in Auckland, compared to 38,679 listed for sale. While these volumes are not the largest among types of commercial real estate, the price per square metre suggests that it can fetch a premium for investors.

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What kind of Auckland property has seen a spike in asking prices or available land? 

The average asking price for retail property was $6,941 per sqm - the highest of any commercial class during the quarter. For lease, the average was $809 per sqm - nearly four times the overall commercial average during this three-month period.

When the property is in the right area, retail real estate can be extremely profitable for both investors and businesses. This is reflected in the relative scarcity of retail space and the high prices for anyone interested in renting or buying it.

Industrial property in Auckland (Warehousing)

Where retail packs a punch in terms of price per sqm, industrial property in Auckland may be a more affordable long-term investment. The average industrial area for lease was 1,594 sqm in Q2, and 1,040 sqm for sales listings. This means a price per sqm of $2,782 for sales and $164 for leases - well below Auckland-wide averages for the quarter.

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Industrial land and buildings could be an affordable investment 

Industrial buildings are also the most widely available type of commercial property in Auckland, with more than 1.5 million sqm in total listed for lease in Q2 and 188,266 sqm for sale. Based on our listings data, industrial buildings and land could be the bread and butter of an investment strategy - widely available at a relatively affordable price.

Warehousing property is typically not available in high volumes, but the first two quarters of 2017 have seen somewhat of a resurgence in listings. Average sizes are in the same ballpark as industrial buildings, while the prices per sqm for both sales and leases are slightly lower.

Office buildings in Auckland

Buying office property in Auckland is at the expensive end of commercial investment costing an average of $4,398 per sqm. However, when leased out at average of $509 per sqm there is the opportunity for strong yields if the right property is found.

Central offices are likely to always be in strong demand.

While the amount of office space available for sale in Auckland (just over 38,000 sqm) has declined in the last few quarters, the total volume available for lease is at its highest point since Q3 2012. The key here will be finding prime commercial space - despite the premium, central offices are likely to always be in strong demand.

Ready to buy Auckland commercial property?

While the prices for Auckland commercial property are undoubtedly higher than anywhere else in the country. The sheer volume of business done here makes it an unmissable location for potential commercial investors. Keep in mind as well that these figures are averages - buyers and tenants are likely to find plenty of opportunity either side of these benchmarks.

When you're ready to make a purchase, get in touch with an agent at realestate.co.nz - we have all the data you need to make an informed decision.