A strong horticulture and viticulture base has underpinned the Hawkes Bays regional economy and provided a buffer from the recent slide in dairy prices.
Based on the ANZ’s latest composite index of economic activity the region has recorded three consecutive quarters of growth to March 2015. Regional exports are up 16% on a year ago and the Port of Napier is anticipating total container volume growth to reach 20% over the coming year. Job ads growth in the region has also picked up largely on the back of improved fortunes for the pip-fruit industry.
In contrast the local commercial and industrial property market remains relatively subdued following a significant burst of development activity and tenant reshuffling over 2012/2013. This has lead to backfill issues and increased vacancies amongst poorer grade commercial premises in both Napier and to a larger degree Hastings which will take time to resolve. One area of continued growth and activity has been in the construction of new cool store and pack house facilities to support the growth and expansion in the horticulture sector. Demand for further storage and logistics related facilities is expected to continue to grow.
The Hawkes Bay region is a major producer, processor and exporter of primary products – beef, lamb, fruit and vegetables, forest products and wine. The strong influence of primary industry is apparent within the industrial sector with the region housing a high proportion of specialist buildings such as pack-houses, cold/cool stores and controlled atmospheric buildings. These cater for an increasing number of corporate and independent growers...read more.
Like many regional centres throughout the country vacancy levels in Napier and Hastings retail CBD’s have been rising over the past few years. The result of slower population and CBD business growth as well as increased competition from big box retailing centres and competing locations such as Ahuriri...read more.
Activity in Napier’s CBD office leasing market remains very subdued. Much of the development activity that occurred over the 2012-2013 period was largely a reshuffling of existing tenants into better quality space along with some speculative seismic strengthening.
The result has seen an increase in the total amount of office stock in the CBD and has created significant backfill issues. Vacancies amongst poorer secondary grade space are sharply higher. Equally competition from new destinations such as Ahuriri are also attracting office tenants from the CBD, one of the largest being insurance broker Crombie Lockwood who moved there in 2013. In an attempt to slow the leakage from the CBD Napier Council is limiting the office component of all new mixed use developments to just 20%...read more.
For the full MARKETBEAT report, click here.