Perhaps surprisingly, says Ray White Commercial director Philip Hunt, despite Covid-19 the Tauriko Business Estate is busier than ever.
A Tauriko specialist with eight years’ experience in the area, he says he initially feared that some of the smaller operators could be hard hit.
“But without exception, the smaller operators have moved very rapidly, repositioned their businesses where necessary or moved online,” he said.
“Their businesses have moved dramatically and positively and I get more calls now from industrial tenants saying ‘help me get out of these premises because I’ve outgrown them’.
“Without exception it’s not because they’re having to close – it’s because they want to move into larger premises.”
Hunt said that because he has a following of tenants, he is able to get them out before their leases end because he has probably sold the property to a good landlord who understands he will find new tenants for them without problems.
“I go to the landlord and say your tenants have outgrown the premises, can I get them out early. And they say sure, just bring me a new lease.”
Asked why the business estate is performing better than might have been expected given the impact of the pandemic, Hunt puts it down to what he calls the Tauranga/Tauriko bubble.
“I think economists and banks don’t understand how this bubble works,” he said. “I would say a large part of it is caused by our proximity to the Port of Tauranga.”
As a result of the port, importers and exporters of all sizes can ensure ready access to material imports and to destinations both nationally and globally, he said.
“These companies that are expanding are in many cases new, with young people running them – it’s exciting and encouraging.” – Philip Hunt
Hunt has been involved in developing around 200 industrial unit developments in Tauriko, as well as several in Mount Maunganui and Papamoa.
“I keep very strong records on all my enquiries so I know what people are looking for,” he said.
“At any given time I have a snapshot of the market and the demand that is there.
“Then I will bring a development on and sell off the plans to satisfy the demand of that market.”
A typical unit development would take around a year or so, and Hunt says that past experience can see a large capital gain during the development period for someone buying off the plan, usually because of the increase in land value.
But he cautions that investors shouldn’t buy just for capital gain.
“These are long-term holds and are designed as a launch pad for people who want to get into a commercial or industrial investment and people generally buy and hold,” he said.
“And we getting more and more first-time investors who are residential people shifting their focus.” One of the key attractions was the continuity and reliability of both landlords and tenants, he said.
“I’ve had residential investors come to me for industrial and have one now on his seventh property. He’s never had a week without a tenant. He’s an exceptional landlord and that word gets out.”
Hunt strongly believes in Tauriko’s potential and is always an investor himself.
“I am always on the property and new investors should ensure they build a relationship with their agent and that the agent can deliver tenants.
“I have a following in that part of the market. So if anyone’s going to tenant them it will be me and my team.”
Hunt has appointed Christy Arundel, a licenced sales person specialising in the Tauranga CBD and Tauriko, as his second-in-charge.
He described Arundel – who won a “Client’s Choice, Customer Service, Individual” award at the recent Ray White International Awards – as “an exceptional talent”.