Lodge Commercial Real Estate Hamilton - Hamilton Commercial Prime News

The New Zealand Herald featured a full page on Hamilton’s commercial and industrial prospects in its Prime AssetsCasabella Lane section on Saturday, November 28, which highlights the growing interest in the city’s prospects.

The Herald noted that with prime rents around 15% - 20% lower than Auckland it made good economic sense for businesses who are looking for a geographically strategic North Island presence close to Auckland. The rapid development of the city coupled with its healthy mix between primary, industrial, manufacturing and professional sectors had meant Hamilton had weathered the economic storm better than Auckland. There were currently a number of national and international tenants looking for space within the city as well as keen interest from investors.

Industrial properties were of particular interest to investors. However, The Herald noted that lease terms and tenant strength were increasingly important to investors. This is a trend the commercial team have noted over the past 18 months and believe that in many cases investors are prioritising the financial health of the tenant above the intrinsic value of the building. The paper cited an interesting growth fact for Hamilton industrial property noting that it had grown at double the rate of Wellington, adding more than 300,000m2 of floor space, since 2000. In addition about 170ha of rural land will be re-zoned industrial land but not be available for bulk retail without resource consent.

The report did draw attention to some issues within the commercial sector that the City Council were working to address. Firstly the vacancy rate within the CBD office market was around 10%. Whilst this was concentrated on lower quality buildings the demand for A grade office space had dropped about 6% during the past year. The inner city office market contained 250,000m2 which was about 1/5th the size of Auckland. This drift away from the central city was being addressed by Variation 21 in the Hamilton City Councils Proposed District Plan in an effort to refocus businesses back into the CBD. With top quality green star office space available at $300/m2 or less the city offers the best value of all the main centres.

It is terrific that Hamilton is catching the eye of investor rich markets such as Auckland attracting businesses and with them jobs for the city. However, this should be a wake-up call for local investors. There are great opportunities being passed over in Hamilton, a city where the fundamentals are strong and where the competition from national investors has been largely overlooked thus far.

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