The industrial market in Rotorua has been rated “extremely buoyant”.
Telfer Young, the respected valuer, has issued figures in a series of three graphs which point in general to the continued rise in the city’s fortunes.
“Vacancy levels are at an all-time low and development of land is scarce,” Telfer Young says in its June 2019 report.
“Rental levels are increasing across the board and yields are firming.”
Telfer Young depicts an overall healthy scenario, though retains caution in some areas.
It lists two categories – trend and supply – of the occupier market.
The trend for supply in what it lists as prime (main roads) is limited, while for secondary (side streets) is “very limited”. Net yields fall between 6 per cent and 7.5 per cent.
Investor market demand is “strong” in both categories, Telfer Young says.
Not so bright news is evident in the retail summary graph format.
“After a period of improvement, the Rotorua CBD retail leasing market has slowed in recent months and vacancy rates appear to be slowly increasing,” Telfer Young observes.
“Rental rates are still very inconsistent.
CBD prime rentals are between $400 and $250 a week, with the CBD (secondary), bulk retail and suburban areas between $250 and close to $100 per week.
Occupier trends ranged from ‘moderate’ to ‘limited’ to over-supply in the suburban areas. Bulk retail is listed as limited, CBD secondary ‘over supply’ and CBD prime ‘moderate’.
The investor market in this category runs a gamut of two areas – strong and average.
Demand for CBD prime areas is listed as ‘strong’, CBD secondary ‘average’, bulk retail ‘strong’ and suburban ‘average’.
Rotorua’s commercial office market is in two distinct tiers, Telfer Young says.
“Good quality is sought after and rental rates have established a new level. The secondary office market is static with limited demand only.”
Net yields were from 6 per cent (prime) to 8.5 per cent (secondary).
While the occupier market has been ranked ‘limited’ (CBD prime, suburban) and ‘over supply’ (CBD secondary and CBD C grade) the investor market is strong in CBD prime, but ‘average’ in the CBD secondary, CBD C grade and suburban listings.
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