Vacancy survey on a building by building floor by floor basis in Prime office buildings
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Prime vacancy sits at 2.4% at structural levels
ex-Fonterra Centre recently vacated *building is consented to be altered to residential units and is now withdrawn from the vacancy review
Prime tenants looking to accommodate growth = tenants are facing very limited available premises space in the Premium +Grade A office markets driving rentals higher
Demand continues to remain strong in 2016 as tenants continueto seek out quality space.
Prime office vacancy tight at 2.8%
Demand from the private sector for prime office space remains high with tenants seeking out greener, safer and more modern premises.
Strong competition for quality office space has continued to push rents higher in 2016. Limited availability of prime premises has resulted in fewer options for tenants, with many being forced to consider lower quality alternatives.
Average prime yields have seen compression, driving the average to 7.9% and are forecast to firm to 7.0% in late 2016.
Strong demand for high quality office space has fuelled a healthy development pipeline including the new 10,000sqm office development located on Site 10 on the waterfront. This is largely 44% preleased to PwC. Construction is set to commence in 2016 with completion by mid-2018.
Overall core CBD vacancy at 17.6% and is forecast to increase as new supply continues to hit the market
In excess of 80,000 square metres of office space will be delivered over 2016
Landlords are becoming more willing to split larger floor plates to accommodate smaller tenants
Over 70% of total office stock is classed as A Grade with limited B and C grade space available.
The government occupied Justice Precinct will be delivered in 2016 – 40,000sqm building that will alone will bring 2,000 people to the CBD daily.
Over 3,000 car parking spaces currently under construction to cater to office and retail demand
A waterfront driven shift has been sustained and continues in 2016
Demand for office space in areas close to Wynyard, Britomart and the Viaduct
Prime office vacancy rate 5.7%
An additional 30,000sqm prime office space expected by mid-2018 =relief to increased levels of market demand as development pipeline begins to enter the market.
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