Snapshots

Wellington office
market snapshot 2Q20

August 05, 2020
Demand

Demand for prime office space in Wellington has been maintained across the half,with vacancy rates remaining low at 0.6% in 1H20 (a slight fall from 0.7% in 2H19). Secondary vacancy has increased though to 9.9% from 8.3%, prompting a 1.1% rise in total vacancy to 7.0%. With the prevalence of Government tenants as a key demand driver for office space in the capital, prime demand is likely to remain high. Continued high pre-leasing levels among buildings currently under construction also indicates a preservation of this trend.

Supply

Total stock increased by approximately 4,000 sqm over 1H20, including the completed refurbishment of Pastoral House. Meanwhile, 69,000 sqm of office stock remains under construction in the pipeline. There has been a number of new additions at various stages of planning and construction this quarter. Among these is the refurbishment and conversion of the Dunbar Sloane building, as well as the ~3,000 sqm development of the Victoria Lane Office Campus by Willis Bond & Co.

Asset performance

Over 2Q20, average prime yields firmed 5 bps to 6.55%, while average secondary yields remained at 1Q20 levels of 8.63%. Both prime and secondary face rents have remained at 1Q20 levels of $583 psm and $355 psm respectively. Insurance premiums and general ownership costs remain significant factors in investment decisions for Wellington's office market, while a lack of quality stock in the CBD continues to support rental levels. Moving forward, however, we expect to see yields diminish in response to wider economic concerns while incentives increase.

Fill out this form to download all Wellington market snapshots

There was an error submitting the form. Please try again. 

PRIVACY NOTICE

Jones Lang LaSalle (JLL), together with its subsidiaries and affiliates, is a leading global provider of real estate and investment management services. We take our responsibility to protect the personal information provided to us seriously.

Generally the personal information we collect from you are for the purposes of downloading materials you have requested.

We endeavor to keep your personal information secure with appropriate level of security and keep for as long as we need it for legitimate business or legal reasons. We will then delete it safely and securely. For more information about how JLL processes your personal data, please view our privacy statement.