Colliers International research shows Auckland 42nd most expensive place to rent prime office space
Auckland is within the top 50 most expensive places in the world for CBD office rents, while prime industrial rents aren’t far behind.
That’s according to an analysis of six-monthly rental data from Colliers International’s offices in 69 countries.
Chris Dibble, Director of Research and Communications at Colliers New Zealand, says his team compared more than 210 office precincts and 220 industrial precincts from around the world.
“We found Auckland was the 42nd most expensive place in the world to rent prime CBD office space, and the 56th most expensive to rent prime warehouse space.
“Wellington was in the 57th spot for the office sector and the 68th spot in the industrial sector.
“Christchurch weighed in at 68th and 89th in the office and industrial rental rankings respectively.”
Similar to past results, Hong Kong took out first place for the most expensive place in the world to lease both office and industrial space.
“A prime office in Hong Kong’s CBD will set you back an eye-watering average of NZ$3,314 per square metre.
“Hot on Hong Kong’s heels, but with some distance in between, was London’s West End, where office space costs $1,891/sq m. Finishing out the podium was Paris at $1,174/sq m.”
By comparison, average prime office net rents in New Zealand are $478/sq m in Auckland, $388/sq m in Wellington and $370/sq m in Christchurch.
“That’s still relatively inexpensive compared with Sydney, which ranked fifth globally at $1,037/sq m.”
“Those rents are more than three times higher than in New Zealand’s main centres,” Dibble says.
“Average prime industrial net rents are $124/sq m in Auckland, $108/sq m in Wellington and $103/sq m in Christchurch.
“By comparison, the average prime industrial rate in Sydney is $157/sq m.”
From an investment perspective, Hong Kong not only has the highest rents but also the strongest yields, with a capitalisation rate/initial yield of 2.3 per cent.
With the exclusion of Dubai, cities with a top 10 rental ranking have a cap rate/initial yield between 3 to 5 per cent.
Auckland, Wellington and Christchurch remain slightly above these rates, with prime average office yields between 6 per cent and 7 per cent.