Christchurch’s industrial property market continues to be one of the highest performing in New Zealand, highlighted by a trio of recent sales that collectively notched approximately $47 million.
The deals were negotiated by Hamish Doig, Mark Macauley, and Sam Staite of Colliers Christchurch and demonstrate the strength of the local market.
“Despite volumes lagging in the rest of the country, Christchurch investment property is continuing to transact on a big scale. There’s real activity in the market, with a strong mix of out of town and local buyers,” Doig says.
“Christchurch appears more insulated from the current economic pressures that other centres are feeling because of our affordable property values and our successful earthquake rebuild that has really helped to underpin a general business confidence in the province.
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“Yields are ranging from 5.75 per cent to 6.25 per cent, reinforcing that our market is holding up well.”
Staite, Director of Industrial at Colliers Christchurch, says the Christchurch property market is still regarded by investors as undervalued across commercial, industrial, and office with record low vacancies in all three sectors.
“Private investors are back in force. They’ve been sitting on their hands for the past five years when they felt the market was overheated. But now there’s substantial canny capital looking for a home.”
Christchurch-based funds manager Mainland Capital paid approximately $30 million for a large 3.9481ha industrial property at 20 Sir James Wattie Drive in Hornby. The campus style development consists of three warehouses built between 2008 and 2012 and has only 32 per cent site coverage.
Ben Bridge, Director of Mainland Capital, says they acquired 20 Sir James Wattie Drive to provide further diversification and income generation for their A-grade logistics fund, Mainland Income Fund 3.
“We were attracted by the prime location, quality buildings and tenants, and the ability to develop the site further over the medium term. The Canterbury industrial market is the second largest in New Zealand with strong growth drivers and we will continue to be an active developer and investor of stock in this space.”
In another stellar transaction, bottom drawer investment 2 Headquarters Place in Canterbury’s premier industrial business park Hornby Quadrant sold to a local investor for $12.6 million. The dual-frontage site is occupied by global heavy vehicle behemoth Penske on a 15-year lease. Constructed in 2018, the building floor area represents about 31 per cent of the total land area.
The third recent significant industrial sale is on a high-profile corner site at 9 Establishment Drive, also in Hornby Quadrant. Constructed in 2019 for SuperTyre, it was snapped up by an out-of-town investor for $4.35 million.
Doig, Managing Director at Colliers Christchurch, says each of the properties attracted multiple offers with investors lured by the highly sought investment fundamentals of long-term leases, strong tenants, and fixed rental growth.
“The location was also a big drawcard with investors appreciating how Hornby Quadrant has established itself as the pre-eminent industrial park for businesses focused on efficient city-wide logistics.
“Adjoining the city’s major motorway systems, it’s no wonder that the largest distribution centres, including Foodstuffs and Woolworths, are all domiciled in this area.”
- Article supplied by Colliers
