Demand stays high for Hornby industrial property

Demand is high for industrial land in Hornby - one of the most sought-after industrial locations in Christchurch. Photo / Supplied

Savills says Hornby is retaining its status as the pre-eminent location for industrial property occupiers in Christchurch, with demand trends and development activity demonstrating the ongoing strength of the suburb's property market.

Mitchell Ryder and Greg O'Brien, industrial sales and leasing brokers in Savills' Christchurch office, say demand for industrial land in Hornby remains high and the area is still one of the most sought-after industrial locations in Christchurch for both occupiers and investors.

"Hornby underwent a building boom following the Canterbury earthquakes, when several businesses were left with earthquake-damaged premises in other parts of the city," says Ryder. "This resurgence has gathered strength over the years as Hornby retains its status as 'the place to be' for industrial occupiers, developers and investors."

Hornby's popularity is largely due to the high quality of the underlying land, the prevalence of modern building stock and local roading improvements. These factors have attracted increasing numbers of logistics, storage, distribution and manufacturing companies to move to the suburb since the earthquakes.

As a result of Hornby's popularity as a business location, there have been few larger-scale transactions of industrial property recently. CoreLogic data shows just 10 sales above $4m in the Hornby and Hornby South areas in the two years to June 30, 2019, says O'Brien.

"Property in Hornby is very tightly held and much of the area's industrial land is controlled by a small number of large property investors and developers. When sites do come to the market, they generally get snapped up quickly."

One example of a recent sale is the Timber Treatments Ltd facility at 25 Yukon Place, which the Savills brokers sold to a local investor for $4,045,000 in early 2019. Timber Treatments has leased the property since 1988 for its predominantly yard-based requirements.
The sale price, which equated to $245 per square metre across the large 16,457sq m site, represented a yield of 7.66 per cent, Ryder says.

"The investor who purchased the property liked its investment characteristics including the longstanding tenant, the location in the heart of an established heavy industrial zone, as well as the added benefit of low site coverage which reduces the likelihood of an expensive building maintenance burden in the future."

As the South Island's largest developed industrial area, Hornby has around 740ha of industrial land, much of it under accommodative Industrial zoning.

One of the most prolific industrial developers, Calder Stewart, has staged the release of over 150Ha of land at its Hornby Quadrant industrial park.

The latest occupiers to sign up to the development include Hafele, Penske, Komatsu, Winstone Wallboards and Super Tyre, which join Waste Management, Fletcher Steel, Sleepyhead, Seed Force, AB Equipment, NZ Trucks and Festive which have recently moved into new design-built facilities.

Some sites for design and build facilities are still available within the first two stages, with a new third stage opening soon after the completion of the new Southern Motorway.

Occupiers in Hornby Quadrant, along with those in the rest of the Hornby industrial precinct, benefit from functional transport links which enable servicing of metropolitan Christchurch as well as access to Lyttelton Port and State Highway One.

New on and off-ramps to the Southern Motorway at Shands Rd, due to open as part of the Southern Motorway extension, will further strengthen transport access for businesses operating in Hornby, says O'Brien.

"The Southern Motorway extension has been a factor in the continuing demand for industrial property in Hornby. This is one of the most significant roading projects in Canterbury's history, which will bring benefits for property owners and occupiers along its route between Hornby and Rolleston."

The Shands Rd interchange will be a vital link for local industry because of its position next to the Hornby Quadrant industrial park and also within easy reach of businesses in the wider Hornby industrial area, he adds.