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Auckland North Shore commercial market update – Q2 2023

See below for a summary of the biggest trends in the Auckland North Shore commercial market, plus an outlook on the next 12 months.

Tight industrial markets

Industrial markets are facing low vacancies due to ongoing demand for warehousing. Industrial rental rates have been growing across the region, particularly for prime properties.

Two-step retail market

Service retail like cafes are generally performing better than boutique retail. Consumer preferences are evolving towards more experiential retail which service retailers can offer.

Prices stabilising for development land

Softening yields and higher construction costs have taken the pressure off prices for development land. Construction costs are starting to stabilise as supply chain issues are resolved and subcontractors become more readily available.

Outlook for the next 12 months

Commercial property market subdued

The local market is experiencing similar trends to those seen nationally, with generally lower sales volumes and some sub-sectors experiencing downward prices. Leasing activity is expected to remain reasonably buoyant.

Yields stabilising at higher levels

Rising interest rates have led to a softening of yields across most markets. Signals that inflation and long-term interest rates are peaking means yields are likely to stabilise at higher levels. Lower numbers of sales transactions means there is less evidence available to showcase this trend.

Flow on impact of floods

Insurance companies are evaluating their risk profiles after the impact of the recent floods in Auckland. Potential increases in premiums may increase the outgoings on industrial properties.

Download full report (PDF)

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