New Zealand office market snapshot Q3 2021
JLL’s New Zealand Office Market Snapshots provide property insights into how the office market is faring within Auckland, Wellington, and Christchurch.
Our real estate market research is based on data from several reputable sources including on-the-ground insights from our own departments. Reading our office property insights from the previous quarter will help to guide your property decisions in the quarters ahead.
The current narrative for office is not uniform across the country and represents a multi-layered ‘story within a story’ of a divergent locational market experience in Auckland, Wellington and Christchurch and, within each city, between primary and secondary grade space. These clear submarkets within markets means our property research requires an asset-by-asset approach to decision making and realistic forecasting is now imperative.
For example, JLL research shows elevated vacancy in offices within Auckland’s core would indicate that the pressure is clearly on and the prevailing wind has shifted towards offering a favourable tenant landscape. However, while prime vacancy surged to its highest level since 2011, this figure does conceal the uneven spread across the CBD on a building-by-building basis given that around 50% of total prime vacancy can be attributed to five buildings alone.
Meanwhile, in Wellington and Christchurch, our property market research shows a different picture. Office vacancy has declined across all Wellington office grades with overall vacancy significantly dropping while prime rents have grown and secondary rents remaining stable.
Similarly, overall vacancy has fallen in Christchurch as tenants move back into the CBD with only select pockets of space remaining on the market and development slowing down to a drip. Prime CBD rents have plateaued for the ninth consecutive quarter.
Capital values across the country have been protected to a degree by yield compression yet changes in individual occupier strategies are certainly causing disruption. While our borders are still restricted and our economy continues to be driven without tourist assistance, in office market terms our New Zealand property insights show it has been largely business as usual in Wellington and Christchurch and to a lesser extent in Auckland.
Some of the questions answered in the latest report include:
- What office precincts have been impacted the most by new ways of working?
- Will increased office vacancies cause rents to drop?
- What office projects are in the pipeline for Auckland, Wellington, and Christchurch?