• 

  Download Full Report - 513.0kb

WELLINGTON INDUSTRIAL REPORT SUMMER 2011

INTRODUCTION

The latest Bayleys Research Wellington industrial survey shows that the impact of the 2009 recession continues to be felt with vacancy levels up and tenants very much in the driving seat when it comes to lease negotiations. That having been said, market leasing activity shows that landlords who position their properties correctly in the trade off between quality and price and who take a pro-active approach to management are being successful in attracting and retaining tenants.

In discussions with local industry leaders Bayleys Research found that there was broad agreement as to the trends currently dominating the industrial property market primarily being:

·Vacancy rates have increased and upward pressure remains due to there being few growth sectors within the economy

·Rental and land values also remain under pressure

·Cash flow and tenant retention is imperative in order to maintain asset value

·Landlords must be more pro-active in respect of management

·Maintenance issues must be dealt with efficiently

·Lease renewal negotiations must be opened early

·Landlords should seek a trade off when providing tenants rental assistance e.g secure a longer lease term

·Banks have tightened loan to value criteria

·Prime investment stock under $3 million continues to attract strong competition

·The yield gap between prime and secondary stock is widening

·Owner occupiers and syndicators have become far more active in the market

While the above lists the general themes currently in play there are local variations across the region’s various precincts reflecting their own specific circumstances as detailed in the following precinct reviews.