Hawke’s Bay Commercial Property And Economy Upbeat

The region’s economy bounced well from the first Covid lockdown, which is reflected in the latest Hawke's Bay commercial and industrial property reports from Turley & Co.

“Hawke’s Bay has been rocking and the numbers remain impressive, including an ASB Regional Economic Scoreboard Q2 second-place regional economy ranking, up nine places since pre-Covid,” says director and registered valuer Pat Turley.

“Hawke’s Bay new building consents for all categories are up 41 per cent and for residential alone 53 per cent for 12 months.

“The Hawke’s Bay median house price has increased a massive 35 per cent in 18 months.

“Unemployment is down from 4.1 per cent to 3.2 per cent for 18 months and retail occupancy has stabilised at its pre-Covid level.

“Notwithstanding Covid, retail spending is up 7 per cent from the last quarter of 2019 to the second quarter of 2021.”

Turley drew his figures from Turley & Co Economic Indicators reports that preface the valuation and strategy company’s macro, retail, office and industrial property reports.

The Macro report observes “prime investment property asset values probably peaked about February 2021. There is potential for valuation factors/ cap rates to soften.”

The Retail Property Indicators report for the first half of this year said Hastings’ CBD was experiencing stable occupancy levels while the Hastings District Council led a ”renaissance and revival”.

“Havelock North’s retail heart remains particularly strong with added supply fully leased and further building underway,” the report said.

“Napier’s CBD overhaul and intensification 2013-17 tapered and occupancy has remained reasonably tight for prime sites.” Meanwhile Napier CBD civic plaza and spatial planning is advancing.

The Office Property Indicators report for the first half of this year said investment yields for office properties were historically low. Public Trust Hastings sold in August for $1.55m at yield 4.8% with 5 years tenancy to run.

“Napier continues to witness office occupiers migration to Ahuriri, and for Hastings migration to Havelock North.”

The Industrial Property Indicators report for the first half of this year said investment yields were also historically low thanks to a strong market including the Milk Kitchen recent investment sale at Whakatu for $7.18m reflecting 4.95% yield with 6.7 years lease remaining.

“Hawke’s Bay industrial land values have been increasing and in particular for Napier given relative scarcity.”

New Zealand economic indicators bode well for Hawke’s Bay, with GDP up 8.3 per cent over 21 months and government spending up 9.6 per cent.

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