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Christchurch

JLL releases Pulse reports for Christchurch market          

Reports on Q3 2016 market performance now available


 

 

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Historic West Coast Hotel for sale/new-zealand/en-gb/news/849/historic-west-coast-hotel-for-saleChristchurchHistoric West Coast Hotel for sale

​​​​JLL has released its Pulse reports on the performance of the Christchurch Retail, Office and Industrial markets for the third quarter of 2016.

In the retail market, delivery of new office space to the CBD market is having positive flow-on effects. Demand is high for food and beverage space to service office workers. Retail spending is up 32 percent in Canterbury since mid-2010, versus a 25 percent increase nationally.

Sales of retail assets in Christchurch has been muted, not because of a lack of demand but a lack of suitable investment grade stock on the market.

Looking ahead, delivery of the Convention Centre will be a critical factor for the success of the CBD's retail sector and its hotel market.

There was a notable bulge in office development activity during 2015 and 2016. Demand is lagging behind the amount of new supply coming on to the market – hence the continued rise in vacancy rates in both the CBD and suburban office markets.

In the Core CBD, vacancy has risen to 22.6 percent and will likely reach 25 percent before being absorbed over two or three years. When you consider the entire CBD, vacancy sits at 13.9 percent. This denotes the faster absorption of space on the outskirts of the CBD, where there are smaller floorplates which are more easily leased.

As expected, we have seen a spike in suburban office vacancy as some occupiers have moved back to the CBD.

Rents have seen some further downward pressure. Tenants are in a strong position, with landlords offering rent-free periods or fit-out contributions.

Vacancy across the Christchurch industrial market rose 120 bps in the first half of 2016 and is sitting at 6.4 percent overall, remaining stubbornly high in the south and east. Meanwhile Western Christchurch continues to see the lion's share of new development.

Rental rates have remained flat since mid-2014 and the continued addition of new space threatens to tip the balance in favour of tenants, particularly in the secondary market.

Transactional activity remains high in the sub NZD 2 million category. Prime yields have firmed to an average of 6.53 percent.  The outlook for the Christchurch industrial market remains positive, with Rolleston playing an increasingly important role in this story as a key freight and logistics hub for Canterbury.