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News Release

CHRISTCHURCH

Vacancy rate in Christchurch CBD office market stabilises

JLL releases vacancy rates for December 2016 quarter


 

 

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Christchurch_office_JLL.jpgJLL has released its Christchurch office vacancy figures for the December 2016 quarter. 

More than 75,000sqm of new office stock entered the Christchurch market in 2016 including the Awly building, ECan Building, BNZ Centre, Vodafone building and Grand Central.

In the Core CBD, vacancy fell to 16.3 percent in December 2016 from a high of over 20 percent at mid-year. 

“Several new buildings such as the PwC Centre and ANZ Centre have been delivered in the Core CBD with little space left to lease,” JLL’s National Research Manager Tom Barclay says. “While this looks positive for the centre of town, when you look at the overall CBD vacancy rate including the Southern Frame and Victoria Street areas, the vacancy rate decreased only marginally to 13.4 percent. 

“Vacancy in the Southern Fringe of the CBD increased in the second half of 2016. It’s now at 9.9 percent, up from 6.6 percent, demonstrating the preference for more centrally relocated office buildings which are surrounded by a wider range of new and exciting retail options. 

“In the Victoria Street precinct, vacancy also rose slightly from 11.6 percent to 12.4 percent.

“Overall, the average CBD vacancy rate for the three precincts is sitting at 13.4 percent. Compare that to the suburban vacancy rate which is over 16 percent and rising. Suburban vacancy will continue to remain high because of the flow of occupiers that are now moving back to the CBD. This is particularly evident around the Lincoln Road area, where vacancy is in excess of 20 percent,” Barclay says. 

“Suburban locations will continue to struggle against competition from the CBD. While many have doubted the new CBD, the fact remains that the big four banks and big four accountants have committed as have the majority of Christchurch’s major law firms and government departments, not to mention the two telco providers. These 

large-floorplate occupiers have formed a solid nucleus around which a retail sector should flourish over time. 

“It makes sense for other occupiers to be near this nucleus if they work in conjunction with or service any of these major occupiers. Of course there are many occupiers who don’t need to be in the CBD. They will be able to take advantage of a tenant favourable suburban market for the foreseeable future. 

“Overall, the outlook for the Christchurch office market in 2017 looks more positive than 2016 as further major office and retail occupiers enter the CBD. While the vacancy rate has stabilised somewhat, there remains an apparent lack of tenants to fill the smaller remaining spaces. Landlords will have to fight to attract tenants by offering carrots in the form of incentives to try and lease up these remaining spaces,” he says.  ​