The latest Auckland office vacancy figures are painting a slightly different picture than previously imagined regarding the impact that COVID-19 has had on office vacancy in Auckland’s CBD. It shows that in H2 2020 this impact appears to be less than expected, indicating that the CBD office is definitely not dead.
Though vacancy rose from 7.4% in June 2020 to 12.4% in Dec 2020, equivalent to 72,000sqm as highlighted in the latest CBRE Auckland Office Vacancy report, more than half of this can be attributed to new prime quality CBD office stock becoming available. This includes the PwC Tower in Commercial Bay, Kiwibank Building, 10 Madden Street and the office component of Britomart Hotel; these alone added 42,000sqm of prime office stock and highlighted yet-to-be-occupied new space and the ’backfill’ impact of occupiers relocating to new buildings.
Overall this shows strongly positioned prime office space with the right fundamentals in the CBD continue to draw interest as companies examine their need to build teams, culture and development amid new ways of working. This confidence is shown also by new office offerings such as the Alberts concept taking substantial space in the CBD and attracting businesses.
The previously existing backfill process caused by organisations moving into major new buildings last year has been a far bigger driver of the current vacancy picture, so we are positive about the future for prime office space with the right fundamentals in the CBD.
Auckland CBD New Vacancy Composition H2 2020