Low vacancy rates across industrial property in Tauranga was a prevalent theme of the inaugural vacancy survey completed by Colliers Tauranga, as the sector has remained resilient despite the challenging economic conditions of the past year.

The survey covered industrial, office, and retail premises across Tauranga and Mount Maunganui.

While, in line with national trends, demand cooled over 2024, conditions within Tauranga’s industrial sector remain tight.

The total vacancy rate across the Tauranga and Mount Maunganui industrial precincts stood at just 3.64 per cent as of December 2024. This puts vacancy in line with Christchurch where data from a survey taken by Colliers last year pegged the city’s industrial vacancy rate at 3.2 per cent.

Tauranga’s figure is slightly ahead of the Auckland and Wellington markets which, as at the date of the most recent surveys, had vacancy rates of 2.1 per cent and 2.4 percent, respectively.

When examining the vacant space across the industrial sector in Tauranga the data shows that leasing opportunities within larger buildings, those with a total net lettable area of over 1,000sqm, remain limited. Buildings with more than 1,000sqm of total net lettable area had a lower vacancy rate than smaller units.

This is particularly prevalent in Tauriko, an area that has seen considerable development during the past few years, with only two properties over 1,000sq m sitting vacant.

Rachel Emerson, Industrial & Retail Broker at Colliers Tauranga, says the industrial sector remains a solid performer amid a recessionary environment.

“The Mount Maunganui industrial area has an overall vacancy rate of 3.03 per cent, which despite remaining at relatively low levels, has seen an increased number of leasing opportunities being brought to market over recent months. This can likely be attributed to a slowdown in the logistics sector as businesses have looked to optimise their footprint relative to their operations,” Emerson says.

“Comparisons in footprint across the precincts is also interesting and we would anticipate that only the Tauriko footprint will materially increase as future stages are built out against the more mature areas of Greerton, Judea, and Mount Maunganui, where land supply is constrained.

“While the cost of industrial land has stabilised recently, building costs remain high, which could impact the current pipeline of projects with few major developments currently in the works.”

While the CBD retail vacancy rate in Tauranga was on the high side at 15.6 per cent, local surveys in the past few years had tabbed it in the early 20s.

“This vacancy figure is mildly encouraging and changing economic conditions as interest rates drop should help contribute to greater spending power for consumers and this may drive retail activity,” Emerson says.

The office vacancy in Tauranga was 10.6 per cent and the landscape is set to change considerably in the coming years.

Clark, Managing Director at Colliers Tauranga, says there are a number of exciting projects that will reshape the city centre.

“Through extensive private and public investment that will surpass $1.5 billion, Tauranga will soon redefine itself as a vibrant and thriving urban hub,” Clark says.

“With a population that continues to grow as people move to the region seeking a change in lifestyle, civic projects such as the new library and courthouse will add a new feel to the area.

“Premium office space in the Panorama Tower and The Northern Quarter mixed-use development on The Strand are further examples of projects that will enhance the attractiveness of the CBD.”

One other standout figure from the vacancy research was a zero per cent vacancy rate for retail space in Mount Maunganui.

“This highlights how popular this boutique retail and hospitality scene is in the Mount and it continues to remain a sought-after destination for national and international visitors.”

The release was provided by Tauranga Chamber member Colliers and was also published on NZME’s OneRoof.

For more information, contact the Collier’s Tauranga team or visit their office at 4 Cameron Road, Tauranga, 3110, New Zealand. Colliers (NASDAQ, TSX: CIGI) is a leading global diversified professional services company, specialising in commercial real estate services, engineering consultancy and investment management. With operations in 70 countries, our 22,000 enterprising professionals provide exceptional service and expert advice to clients.