April 20, 2022

The world of warehousing

A well-spread investment portfolio is seldom without some sort of property element and we tend to neglect the diversity within its class; residential, industrial, hotels, retail and office.  COVID-19 and other current stress factors are impacting each category in different ways.

Within this property class we see various investment structures. From open-ended funds, to established and tenanted retail space, to farm or other growing land and infrastructure, to mortgage funds and more. 

The Syndex marketplace has seen all manner of offers that suit different investor objectives, be that regular income, capital gains, or exposure to long term responsible investment assets.

A subsector that we find very interesting to follow is warehousing.

Warehousing, or industrial property, is an interesting subsector that has seen demand rise in the last couple of years, encouraged by our increase in online purchasing (lockdown behaviour) and more recently by global shipping disruptions. Auckland has extremely low vacancy rates right now and with current construction planned years ago this is unlikely to change anytime soon.

Land, as a resource, and its prices add to the complexity of adding supply to the market and developers have had to get creative in order to add cubic capacity - building higher-stud structures, multilevel or using mezzanines.

Land might be cheaper in the brownfields, but being on the city fringes is not always a suitable solution for businesses that need to be close to their customers. NZ Post, for example, value a central Auckland location so they can service a catchment of 700,000 within a 20-minute drive.

It's interesting that although the market is tight there is a trend to incorporate the employee experience that cater for staff and their wellbeing. The office asset class has long addressed this aspect with the inclusion of gyms, kitchens, shower rooms and flexible working spaces. Another area of catch-up to the office subsector is their ESG considerations.

Our marketplace regularly has a host of opportunities in residential development, medical establishments, offices and warehousing. Navigate to the markets page to see the latest.

Ross Verry

Ross Verry is CEO of Syndex and a shareholder. The views expressed above are purely his own. Please assess and research all your investment.

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