Hawke’s Bay’s strong economy, underpinned by well-performing primary industries, a tourism boom, buoyant construction industry, and the low interest rate environment, is driving redevelopment of commercial and industrial properties around the region.
“We’re seeing a number of redevelopment projects underway or planned, with a good portion of these projects being previously vacant, redundant or outdated property,” reports Ben Hamelink, a registered valuer with Logan Stone, a Hawke’s Bay-based national valuation firm.
“The continued low interest rate environment has made owner occupation attractive,” Hamelink says, noting that the increase in vacant property purchases was for both owner occupation and development purposes.
He indicated that the continued strength of the local economy was “putting more money in the pockets of Hawke’s Bay businesses” and this was increasing the demand for modern commercial and industrial property and increasing rents.
That, together with the significant rise in construction costs, particularly around the compliance and planning stages, and rising land prices, was making redevelopment of existing buildings a more affordable option than new development, Hamelink said.
His comments follow Hamelink’s research of the Hawke’s Bay commercial and industrial property market over the first half of the year.
In Napier, there has been increased activity about Onekawa with redevelopment projects transforming dated industrial property into more intensive and productive use.
The former Just Commercial Partsworld site between Niven and Wakefield Streets has been subdivided and redeveloped to now contain two large warehouse tenancies with contemporary offices, a new workshop on a freehold site alongside another vacant freehold site fronting Niven Street. There is also a new unit title development fronting Wakefield Street with nine modern industrial units.
Other notable Onekawa refurbishments include properties at 15 Edmundson Street and 48 Niven Street, which both sold separately in early 2018 for a total of $3.95 million after building upgrades and new tenant commitment.
Refurbishment of 78 Taradale Road is currently underway to accommodate the two sitting tenants and six new tenancies. Two of the new tenancies will be occupied by local businesses expanding into higher quality premises.
In the Napier CBD, redevelopment continues between Hastings Street and Marine Parade with the former Opossum World and House of Swords building now fully upgraded and leased to Sotheby’s Real Estate, Mexicali Fresh and Colliers International.
The adjoining three-storey development on the corner of Hastings and Albion Streets is now complete and fully leased. The nearby Central Post Office building on the corner of Hastings and Dickens Streets, is also fully occupied and was sold to a developer for $8 million after strengthening and redevelopment work was completed throughout 2013 and 2014.
A substantial redevelopment site between Hastings Street and Marine Parade was purchased in early 2018 for a specific development.
Close to $13 million of vacant commercial property in and around the Hastings CBD has sold over the last two years for redevelopment or refurbishment purposes.
Prominent redevelopments include the former Warehouse Stationery building on the corner of St Aubyn and Market Street now occupied by Tremains, the new Bunnings Trade Centre between Heretaunga Street West and Queen Street West, the former Hirepool building now Eye Surgery premises on Karamu Road South, and the recent purchase of the former Futurecol premises on Ellison Road.
For more information please contact:
Ben Hamelink 021 394 496
About the writer – Ben Hamelink is a registered urban valuer at Logan Stone. Ben has recently qualified as a registered valuer and has a good grounding and solid understanding of the Hawke’s Bay market.