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Buoyant mood in Christchurch commercial property market


The picture in the Christchurch commercial property market is the rosiest it’s been for almost a decade, with promising trends across nearly all sectors.

Presenting his 19th detailed annual review of the Christchurch commercial property scene, Gary Sellars, Director of Christchurch Property Valuation for Colliers International, says the market is buoyant.

“Notwithstanding the COVID-19 pandemic, Christchurch CBD office and retail vacancies have followed an encouraging downward trend during the last 12 months. As forecast, suburban office vacancies extended the upward trend, resulting from continued migration of tenants to the CBD,” Sellars says.

He was unveiling his report, with fellow Director Marius Ogg, at the Property Council of New Zealand Market Summit last week

“Our findings are in stark contrast to some popular misconceptions, particularly in terms of the office and retail leasing markets. There is a promising lift in the number of tenants moving into the CBD and leasing options are becoming more limited in the preferred locations such as the West End.

“We’ve seen a notable sublease trend as tenants restructure and rationalise floor space while rents appear to have stabilised.”

Looking at the CBD, Sellars says office vacancy levels are now back to pre-earthquake, and the third lowest since reporting began in 1993.

There is currently 14.9 per cent vacancy in the CBD, compared with 14.3 per cent in 2010 and 10.6 per cent in 2005.

Colliers surveyed 265 properties for the report and found 377,777sq m of total CBD office stock, 84.7 per cent of 2010 levels. The West End precinct along Cambridge Terrace and its immediate surrounds recorded the lowest vacancy.

While suburban office vacancy has increased, Burnside/Russley is a standout performer against the trend, proving popular with large corporates and rural based businesses.

CBD retail humming

The Retail Precinct was a stellar performer in the CBD, with vacancy continuing to fall as the area distinguished itself as a vibrant point of difference to the shopping malls.

“We’ve reached an equilibrium between supply and demand, following significant improvement in occupancy over the past year. Riverside Market is a major drawcard, the prime Cashel St frontage is well leased and laneway vacancies have halved.”

In the commercial investment market, Marius Ogg says there is unprecedented demand for quality assets at all price points with strong competition particularly evident from investment funds and syndicators. Prime CBD yields are ranging between 5.25 per cent to 5.75 per cent on current passing income.

“Informed investors have accepted the perils of COVID-19, rationalised uncertainty and are getting on with decision making. Quality remains crucial as buyers are still risk averse against the wider macro backdrop.”

Examples of significant sales this year include:

· Vodafone Innov8, 213-221 Tuam St. Sold in January for $56.8 million to a national syndicator

· Manawa Building, 10 Oxford Tce, Sold in September for $76 million to a North Island private investor

· 212 Bealey Ave. Sold in August for $5 million to a local investor

· 7 Gallagher Drive, Hornby. Sold in April for $17.5 million to an investor fund


Exceptional demand for industrial stock

Demand is exceptionally strong in the industrial investment market with keen competition from national and local buyers, and strong syndicator interest.

“With low lending margins and money seeking a greater return than term deposit rates, there is extreme competition for the right assets and subsequently we are witnessing yield compression. This has been fuelled by a lack of quality stock available in the market.”

Ogg says owner occupiers are responsible for a good proportion of the industrial transactions at a wide variety of price points.

“Lending obligations are very attractive against the current rates with borrowing costs potentially lower than rent in instances.”


Colliers commercial property brokerage team is the most dominant commercial real estate agency in the South Island. Take advantage of current market conditions and talk to a commercial real estate agent in Christchurch

Related Experts

Gary Sellars

Director, Registered Valuer

Christchurch (Real Estate Management and Valuations)

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Marius Ogg

Senior Director | Valuation & Advisory Services

Christchurch (Real Estate Management and Valuations)

Marius has a broad range of experience in many areas of the valuation profession specialising in commercial and industrial valuation and consultancy advice primarily within Christchurch however also other major metropolitan areas of the South Island.

Marius has had considerable involvement in market rental valuations and portfolio work together with feasibility consultancy. This is principally across the industrial, office, retail and land development sectors.

This has included numerous assignments for both industrial and residential land development from a feasibility and market valuation perspective.

Marius on occasion is asked to act as a sole arbitrator/umpire in rental disputes.  

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