Industrial land dearth set to ease

The scoreboard stand foundations being demolished at Carisbrook yesterday. Photo by Gerard O'Brien.
The scoreboard stand foundations being demolished at Carisbrook yesterday. Photo by Gerard O'Brien.
Dunedin's usual shortage of freehold industrial land will be eased with the redevelopment of former rugby stadium Carisbrook and a more than $5 million woolshed development at Mosgiel.

Carisbrook's new owner Calder Stewart has not released details of the redevelopment nor filed any building consents applications with the Dunedin City Council, but is understood to be having ''multiple sites'' for industrial trade use.

In Colliers International's latest annual report on industrial land investment, research manager Chris Dibble said Auckland and Christchurch continued to provide most of the sector lift with record low yields, rising leasing activity, rental rate appreciation and growing land absorption rates.

''Holding back the sector has been an abundance of secondary space and the absence of robust activity outside of the main regions or distribution hubs,'' Mr Dibble said.

He said the shortage of freehold industrial land in Dunedin would be relieved by the redevelopment of Carisbrook's 3.06ha of industrial 1 zoned land, which was sold for $3.3 million earlier in the year to construction company Calder Stewart.

''The stadium is currently being demolished with plans to provide multiple sites for industrial trade use,' Mr Dibble said.

He said around Dunedin top-tier prime premises providing the best location, business efficiency and seismic strength remained popular for tenants and landlords, but that was counterbalanced by the ''lacklustre performance'' in the secondary tier of the sector.

''Some secondary premises are reaching their economic life, which will impact the health of the overall sector if there is no course of action to refurbish or redevelop,'' he said.

Ground lease rents in the city were continuing to rise, which was placing pressure on net rental rates. Mr Dibble said net prime warehouse rents were ''holding steady'' at between $60 sq m and $90 sq m within the inner city, while there was a slight discount in the outer areas of Kaikorai Valley and Mosgiel.

He said two land sales, with one premises in Mosgiel completed and Carisbrook soon to be under construction, provided some buoyancy to the market, which has experienced more turnover than expansion recently. In Mosgiel, Scales Corporation will complete a new woolstore this year.

Mr Dibble said it would reportedly be sold to a syndicate for about $5.4 million, with annual rental at about $450,000, on a full net lease to agri-services company PGG Wrightson.

-simon.hartley@odt.co.nz

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