Australasian CBD Office First Half 2019

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New Zealand Market Highlights: 

  • New record low CBD office vacancy rate squeezing tenants’ options
  • Development activity rising, but not enough for the medium-term
  • Offshore investors ramping up their activity

Investment market

Tenants are finding current leasing market conditions challenging. This is a positive for landlords who will likely experience greater total returns from higher rents and firming yields in a bullish investment environment spurred on by low interest rates and strong offshore investor interest. Auckland prime office yields range between 5.50 per cent and 7.00 per cent, firming by an average 25 basis points in the past six months.

Leasing market

Auckland’s CBD office sector is facing strong tenant demand, a shortage of available office space and static net supply created from a development pipeline keeping pace with ongoing stock reduction from refurbishments and conversions. Highlighting how strong demand has become and the lack of available space is the new record low Auckland CBD vacancy rate of 5.2 per cent (75,000sqm of vacant space) in the December 2018 survey. Total stock is at 1.3 million sqm. The 20-year average vacancy rate is 10.2 per cent. Current market conditions exacerbate the pressure on tenants who are already finding it challenging to source suitable accommodation.

Australasian CBD Office First Half 2019

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Chris Dibble

Director | Research & Communications

Auckland CBD

Chris Dibble oversees the delivery of award-winning research reports, PR and Communications for Colliers International New Zealand. With over 13 years of experience and university qualifications in economics, geography, marketing and property, Chris has a  multi-disciplinary approach that assists a broad range of clients in their strategic decision making. Chris is a regular presenter and market commentator with an extensive network of media contacts to discuss the latest insights on current and future property trends. Chris also works with in-house and external writers to curate an audience-focused content delivery strategy for Colliers.

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