Auckland Fringe and Suburban Office Market Snapshot Q3 2019
The rental market was characterised by another period of relative stability in 3Q19, with minimal rental growth recorded across the markets tracked.
The suburban/fringe markets remained steady, with no large material change to conditions in 3Q19. Occupier demand continues to tick over, with particular interest for quality stock priced at a level that represents good value. Absorption of space continues despite the softening of general economic conditions. This may begin to impact accommodation decisions in the coming months, although no dramatic spike in vacancy is forecast.
The Takapuna market continues to maintain the highest level of occupancy, with limited additions to supply on the horizon to help shift the market back towards equilibrium.
A handful of sizeable projects continue to progress through the development pipeline. This includes almost 12,000 sqm in the Kimberly Trust’s Marewa Road development, now estimated to reach completion in 2H20.
JLL are aware of a number of new build and refurbishment projects currently in planning. Most of these are waiting to secure an anchor tenant or a pre-leasing threshold before pushing go on construction works. As a result, we expect to see additional projects commence in the mid-term.
The rental market was characterised by another period of relative stability in 3Q19, with minimal rental growth recorded across the markets tracked. The exception to flat conditions was the Southern Corridor, which recorded a 2.8% increase to place the average rental rate at $273 psm. The average suburban rent now sits at $298 psm.
While rents held firm across the other fringe and decentralised markets, growth is expected to return across the board in 2020. A shortage of good quality available supply will reignite upward pressure.