Demand for industrial properties in Wellington has softened marginally, which has reflected in the latest survey results. The vacancy rate for 1H25 stood at 3.5%, which is an increase of 240bps from 2H24. Across the various precincts monitored, the vacancy rate stands at 3.1% for Petone (+2700bps as compared with 2H24), 2.0% for Seaview (+160bps as compared with 2H24), 7.7% for Ngauranga (+680bps as compared with 2H24), 7.1% for Grenada North (+360bps as compared with 2H24), and 3.8% for Porirua (+100bps as compared with 2H24).

Recently, Calder Stewart completed construction at J&D McLennan's new industrial warehouse in Trentham, Upper Hutt. This 17,000sqm owner-occupied site includes a 4,000sqm warehouse, enabling the business to move to a modern building.

Prime and secondary average gross rents stand at NZD 192 per sqm p.a. and NZD 142 per sqm p.a., respectively. Prime warehouse rents range between NZD 152 per sqm p.a. and NZD 216 per sqm p.a., while secondary warehouse rents range between NZD 110 per sqm p.a. and NZD 168 per sqm p.a.

Rental growth is projected to be modest in the coming years. Prime average net combined rents are anticipated to rise by 2.1% (equivalent to +NZD 4 per sqm p.a. annually) through 4Q25, whereas secondary rents are expected to stay flat until 2026. The upward pressure on prime rents is likely to be driven by construction costs, particularly for design-build projects, rather than market demand and supply fundamentals.