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Substantial uplift in office rents in the capital

JLL's Global Office Index released for Q1 2016



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​​office shutterstock_86687308.jpgOffice rents in Wellington are up 8.9 percent compared to last year, reflecting a robust leasing market.

JLL has released its Global Office Index for the first quarter of 2016. The report gives a year-on-year comparison for office rents around the world. 

Wellington has been singled out for its “substantial uplift” in rents. 

“The two new developments in Wellington had a real influence on headline rents,” JLL’s head of office leasing Mark Grant says. “The new PwC centre and 20 Customhouse Quay will revitalise Wellington’s waterfront with quality office accommodation. 

Demand for this kind of space is high and these new buildings will have flow-on effects by encouraging the refurbishment of city and city fringe stock,” he says. 

In an annual rental comparison across 95 global cities, Wellington is at number 18. 

Sydney sits at number six, with a rental uplift of 15.7 percent. 

Auckland is at number 26 with a rise of 6.5 percent, while Melbourne is number 51 with a rise of 2.1 percent. 

Much further down the list are Brisbane at 84 with -3.8 percent, Adelaide at number 85 with -4.1 percent and Perth at number 95, with -21.5 percent. 

The report notes the widening gap between the top and bottom performers in Australia. Government occupiers are a key source of leasing activity in both Sydney and Melbourne, whereas market conditions are weaker in Adelaide and Perth. 

Office leasing volumes in Asia Pacific are up 7 percent year-on-year in Q1 2016 and the region is expected to outperform, with growth of 10 to 15 percent for the full year. JLL forecasts Sydney to be the top rental performer in Asia Pacific for 2016.

In Wellington, office landlords and tenants should think carefully about their options, Grant says. 

“As these new developments come on stream, and the market continues to feel the effects of the government’s accommodation reshuffle with vacancy on the rise, it puts landlords and tenants in a position to negotiate. A good broker will make sure you’re in the best position in this market,” Grant says. 

- To read the full report, click here for the Global Office Index Q1 2016.