Published on: 2018-12-06

Hamilton Commercial Property Sector Booming

Hamilton Commercial Property Sector Booming

The commercial real estate market in Hamilton is experiencing strong growth boosted by infrastructure and population growth in the region, according to local commercial sales and leasing agents.

Lodge Real Estate commercial sales and leasing agents Dean Abraham, Nigel Corkill, Michiel ten Houte de Lange and Vaughan Heslop sat down to discuss the trends in the market. Between them, the team has more than 40 years’ experience working in the local commercial property market sector.

“Hamilton is in high demand as a business centre, and the commercial real estate sector is humming,” says Abraham.

There has been strong demand for industrial buildings, offices, and retail space – especially in certain parts of the city – and there are distinct trends in each category.

Hamilton’s current population is more than 160,000 and is expected to grow to 210,000 by 2045. Strategically positioned in the middle of the North Island, handy to nearby ports and airports, Hamilton is one corner of the ‘golden triangle’ together with Auckland and Tauranga.

It is no surprise, then that Hamilton City is fast becoming a destination for businesses seeking to locate from other centres, says Abraham.

“Over the past five years we’ve seen big growth in Hamilton. Pressure in other regions has prompted the growth of commercial and industrial market offerings here.”

The Waikato Expressway, currently under construction between Pokeno and Cambridge, is also helping boost growth. Due for completion in 2020, the new 102-kilometre road network will shave 35 minutes of travel time off trips between Auckland and Tirau, which is appealing for many businesses.


Growth in this category has been driven by both local and national businesses. While some businesses have relocated to Hamilton driven by more competitive commercial real estate prices, local businesses have also been growing, requiring larger office space.

“There has been growth in local businesses scaling up,” says Heslop. “A number of businesses are committed to staying in the CBD and as their capability grows and staff numbers get bigger, they are moving to larger premises within the city.”

Developers are leading the way, revitalising and modernising established buildings in the Hamilton Central Business District (CBD) and developing new complexes which combine residential and commercial spaces.

“You’ve seen Hamilton City mature, and developers are seeing opportunities,” says Heslop.

The redevelopment of Sentinel House at 586 Victoria Street for law firm McCaw Lewis is a good example, led by property developers Foster Develop and designed by architect Chow Hill.

“Redevelopment there is providing a beneficial change to the CBD and supporting growth,” says Heslop.

Another example is the mixed commercial and residential building, Parkhaven, which mixes three floors of luxury inner-city apartment living with two floors of commercial and retail space on the corner of Tristram and London Sts.

“There are more and more people living in the inner-city, and when you combine it with commercial space, there is a real opportunity for developers,” says Heslop.

Abraham says Stark Property is another Hamilton developer “doing awesome things” with commercial developments bringing life to the city’s heart including new space Victoria on the River. 

Nearby hospitality premises at Riverbank Lane, such as Bahn Mi Caphe and Mr Pickles, are also contributing to city life.

“Developments like this are leading rejuvenation in the CBD,” he says.

There has been some movement for suburban businesses – lawyers and accountants – to set up offices in town. “And why wouldn’t you want to work in the central city, with work next to coffee shops and all the amenities that town offers,” says Heslop. “You are seeing a lot of smaller companies relocate rather than working from home.”


The retail real estate sector has had its challenges, especially in certain areas.

Hamilton’s CBD has some vibrant hospitality and retail zones, which are quite distinct. However there are some “dead spots” within the CBD, admits Abraham.

“The central city retail space has shrunk,” says Corkill, adding that the retail sector has been hard hit by online competitors. “Traditional retailers are finding it tough; many smaller, independent fashion retailers no longer have physical stores.”

The CBD and The Base in Te Rapa continue to battle it out for retail tenants. “The Base has taken a huge amount of space from the central city,” says Corkill. “However, you would be hard pushed to find an independent retailer at The Base.”

Instead, small businesses are moving out to the suburbs. Abraham says there has been a lot of commercial real estate growth into suburban areas, with ‘town centres’ being developed in areas such as Rototuna, Huntington (Portland Park development on Wairere Drive and Gordonton Rd) and Avalon Drive.

These are being led by “one or two” developers, and many follow a similar formula – such as the one at 560 Te Rapa Road – with a service station, core retailers and day care on site – driven by consumer demand for convenience.

With real estate, nothing stands still. “It will keep evolving and evolving,” says Corkill.


Finding quality industrial land in Hamilton has been challenging for some time and is getting tighter.

At Te Rapa Gateway Industrial Park in the north of the city, around 85 per cent of available properties are now sold, indicating strong demand since it was opened in 2014. “There has been a huge uptake, predominately by owner-occupiers,” says Heslop.

The developments on Arthur Porter Dr, including office units and warehouse buildings, are located close to the Waikato Expressway and proposed rail links. “We are seeing local businesses scaling up and committing to a bigger building,” says Heslop, citing Jumpflex Trampolines and Normans Transport & Storage as two examples.

Car yards, including Duncan & Ebbett and Waikato Toyota, have also set up space nearby, indicating the popularity of the precinct.


Abraham says the past five years have also seen “a significant shift” in capitalisation rates.

“Capitalisation Rates are basically the rate of return or yield that a property shows,” says Abraham. “With the lack of stock for sale and the sustained lower interest rate environment people are prepared to accept a lower rate of return.”

Yields are closely link to deposit returns and investors will have their own ‘premium’ they need to achieve above those returns when they factor in the risk of the investment, says Abraham.

“Bank deposit returns at or just above three per cent are not appealing to many people. Where an eight per cent return was common five years ago, the new benchmark is more like six per cent, with better properties even transacting at lower returns than that. There is still a lot of money flushing about looking for a home,” says Abraham.

To get in touch with the Lodge Commercial team visit