Colliers team sets new record

Greg Goldfinch.

Colliers International's 14-member industrial team at Highbrook in South Auckland has reported a record year for 2013, with industrial sales and leases of more than $500 million.

"We finished the year ahead of our previous best ever years from 2010-2012 and the start to this year is the busiest ever so we are predicting that 2014 will be another big year for the Highbrook team," said Colliers' national director of industrial sales and leasing Greg Goldfinch.

The sales success tops a big year for the industrial team, which won the Royal Institute of Chartered Surveyors award for New Zealand's top-selling industrial team for the third year in a row.

"Our Highbrook office conducted some of the country's biggest industrial sales last year, worth about $300 million, with strong yields," Goldfinch said.

Large sale and leaseback programmes were completed for high-profile companies including Tegel, Carter Holt Harvey, DH Steel and Turners and Growers.

Goldfinch said investment-grade offerings were still in high demand.

"For well-tenanted properties with good lease terms, we continue to see very firm yields in the industrial sector, ranging from 6.75 per cent to 8 per cent depending on the size and quality of the offerings."

This looked set to continue this year, but it would be interesting to see the effect predicted increases in interest rates might have.

"The sheer weight of demand may well negate much of the impact that any minimal borrowing increases may have."

Another part of the market to pick up last year was the owner-occupier market seeking the long-term security of land holdings.

"Although we haven't seen the numbers of owner occupiers in the market that we saw before the global financial crisis, we are seeing increasing interest from businesses wanting to own their own bricks and mortar," Goldfinch said.

"This activity stems from business owners having increasing confidence in the state of the economy and the improving global economic conditions."

As well as the sales success, the Highbrook team completed a large volume of leasing transactions, with close to 200,000sq m of commercial space leased.

"A highlight included the negotiation and confirmation in December of an 18,000sq m design, build and lease of a manufacturing base and head office for Metroglass Tech at Goodman's Highbrook Business Park," Goldfinch said. "This was the largest design build deal in terms of its size for the Auckland market for 2013."

Other large leasing deals were completed for tenants including DNZ Supply Chain Logistics, McAlpine Hussman Limited, Sistema Plastics, Placemakers and Hilton Parker Fasteners.

Goldfinch predicted the design build activity would pick up this year because of high demand and a lack of supply of good quality industrial premises.

"We are currently working with a large number of businesses who want to lease space and they have been surprised by their lack of options. For that reason we are starting to see the speculative build market gather momentum, with the likes of Kirkpatrick Group, Goodman and Auckland International Airport having new office and warehouse building projects shortly, ranging in size from 2000sq m to 10000sq m."

Goldfinch said another trend influencing the market was improving transport links in Auckland, which were increasing connectivity for business between the north and south parts of the city. These improvements augured well for the future. He said this had led to the Highbrook industrial team covering Auckland south of the harbour bridge, collaborating to provide a greater range of options for clients with Colliers' North Shore based industrial team which also had a successful 2013.

"With the improving motorway infrastructure in Auckland, tenants from north and south of the harbour bridge are seeing that warehousing and office hubs on either side of the city are very accessible.

"We believe the combination of high demand for industrial space, the new building activity and Auckland's improving transportation infrastructure will result in this year being the busiest in terms of transaction volumes since before the global financial crisis."