New Zealand Market Highlights:
- Auckland CBD’s current 4.7% office vacancy rate is at another record low. There is now less than 67,000 sqm of office space across the CBD.
- Occupiers are considering all qualities of space given the constraints. The prime vacancy rate is at 2.5% and the secondary vacancy rate is at 6.3%, which is a record low.
- The long-awaited completion of Precinct Properties’ Commercial Bay tower of 39,000 sqm is expected to complete in the first half of 2020.
- The development pipeline is increasing as tight leasing conditions increase development feasibility. There is now 86,500 sqm of space currently under construction. There are also a number of proposed office developments with no confirmed timelines and tenant pre-commitment yet. Major tenants in existing buildings with expiries in 2023 to 2025 are being chased.
- Higher rents, low interest rates and a sizeable weight of money from private, listed, offshore and syndication companies are driving investment yields lower. This is expected to continue over 2020.