Industrial owner-occupiers are finding it more economic to own their properties in Christchurch, according to industrial specialists Paul Marshall and Oliver Salt from Colliers Christchurch.
More than half (61 per cent) of the industrial team’s sales this year were sold with vacant possession and a staggering 89 per cent of those were to owner-occupiers.
“We’ve noticed owner-occupiers are becoming increasingly active this year, keen to find efficiencies and have greater control over future escalating costs, particularly during tougher economic climates such as this.
"Owning their premises rather than leasing is often cheaper in the long run and has a variety of other advantages,” Marshall says.
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“Owner-occupiers who have bought this year tell us the option is working well for them.
"A lot are finding economic advantages in owning their own property and handling their own distribution as opposed to paying external companies to store and distribute for them. They also like the flexibility it provides.
“Of course, the other thing it gives them is a good long-term investment with the ability to capture capital gains.”
Marshall points to premises at Tanya Street in Bromley which sold under the hammer for $3.15 million with three bidders.
The purchase allowed the buyer, a building supplies company, to combine several small businesses under one roof.
Other properties recently sold to owner-occupiers include a 5,093sq m premises at Magdala Place, a 1,115sq m building sold off the plans at Waimakariri Park Drive for $3.350 million, a 2,400sq m new build at 29 Mania Road that fetched $7 million, and a 560sq m central city fringe property on Iversen Terrace that sold for $1.3 million.
In competitive bidding, four properties at Halkett Street sold for $580,000 to $920,000, all to businesses looking to own and occupy.
Salt also cites the rising cost of land and construction as a driver for businesses to purchase existing assets.
“Owner-occupiers can often buy an existing vacant property well under replacement value,” Salt says.
“Not only is it often more expensive to build, there’s also the added complication of sourcing a suitable parcel of land, finding a suitable contractor, and working through the challenges of trying to borrow commercial money for projects at present.”
Demand for vacant buildings across all sizes is strong, however, due to the lower value quantum is particularly strong for premises of 300sq m to 500sq m and priced up to the $1.5 million mark.
Fringe areas of the Christchurch CBD remain popular such as Bromley, Woolston, Sydenham, and Addington – all within 15 minutes of the central city.
Salt says auction is proving a popular means of selling to owner-occupiers.
“Buyers like the auction process. Aside from the certainty it provides, it allows them to validate the price because they can clearly see the bidding process. Through auction they get a fair and equal chance to buy in an open forum.”
- Supplied by Colliers
