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Demand for industrial land in Warkworth is strong, but is being hampered by a lack of supply, according to Bayleys north director Mark Macky.
“Businesses are looking at Warkworth as a possible destination, and existing successful industrial and commercial businesses are looking to grow,” Mr Macky says. “But, although there is some live-zoned land in the north, it’s not currently available for purchase or development, and probably won’t be until the Puhoi to Warkworth motorway is built and utilities and services become available.”
Bayleys’ commercial sales and leasing agent Henry Napier says that in the meantime there is a massive shortage of flat industrial land.
“There’s very little land here that is suitable for large big box retailers or distribution centres, which is what I think will be the focus of future growth,” he says.
He believes there will be more interest from large retailers when the new motorway opens.
“We are almost guaranteed to see interest from some bulk retail businesses that operate out of large scale premises, similar to Mitre 10 on Woodcocks Road. We know that Pak’nSave is going in on the corner of Hudson Road and State Highway 1, and when they start developing that site, we think it will trigger other bulk retailers to consider a position in Warkworth.
“There is also an argument that Warkworth will be attractive to investors, in the same way that the Highgate Business Park in Silverdale is, with large industrial land close to the motorway. We may see similar demand from distributors who use large warehouses as logistics hubs.”
Mr Napier says prices for industrial land in Warkworth is rising and can vary from $100 a square metre to $300 a square metre, depending on the property.
Meanwhile, demand for commercial or retail property in Warkworth has been strong, with some yields dipping below five per cent.
A yield or capitalisation rate of a property is the rental income it generates as a percentage of the purchase price. A low yield indicates that a high price was paid for the property.
“When the rate is low, it means there is a lot of demand from buyers pushing up the price. That’s good for the area because it means it is on people’s radars and investors are willing to put their money here.”
Mr Napier says the outlook in Wellsford is also positive.
“Two years ago, we were seeing yields at seven per cent or upwards in Wellsford, but now we are consistently seeing yields at six per cent or lower. That improvement is a result of buyers looking for properties in growth locations outside of central Auckland at a price that is reasonable.
“I recently sold the Subway premises in Wellsford at a low yield of 5.2 per cent, which is competitive for the area. I am definitely seeing a pick-up in enquiries on commercial properties in Wellsford, where there is a sense that the tenant is strong and reliable.”
Mark Macky says that, in comparison to South Auckland, the north is offering substantially better value opportunities.
“The capitalisation rates are similar, but the overall cost of the asset is much lower. In terms of land value and rents, you could estimate that property on average is at least 20 per cent cheaper in the Warkworth area.
“South Auckland has higher prices because it has a higher population with a readily available labour force for industrial business. However, the north has an unbeatable lifestyle and you don’t have to deal with the southern motorway.”
