Auckland, 21 February 2013 – Auckland’s economic recovery during 2012 has led to increased occupier demand for office space, which has maintained positive momentum into the beginning of 2013, according to the latest research published in CBRE’s first Auckland office leasing Property Connectorof 2013.
The publication, which is due out in the National Business Review on 22 February, contains a number of high quality opportunities for occupiers to lease space in new buildings.
It also highlights a number of key trends that CBRE is observing across the Auckland office leasing market, including:
Office demand active and growing
Falling vacancy levels in the CBD and fringe have been driven by net absorption of 30,000sqm in 2012, well above the average of the previous five years. However, vacancy remains at elevated levels in comparison to pre-recession conditions.
Underpinning an expanding office occupier market is an indication that New Zealand’s economic recovery will gain further momentum through 2013.
Landlord influence up, incentives down
The active leasing market and reduction in vacancy have increased landlords’ leverage during the course of 2012. The ramification of decreasing incentives has been that net effective rents have increased by between 4% and 9% during the past year across the various sub-markets.
Flight to quality driven by seismic ratings
The flight to quality premises continues to be a major factor in the market, with new and premium properties attracting occupiers due to a number of factors.
After several years as a core factor in Christchurch and Wellington, seismic ratings are now a prominent issue in Auckland, with company insurers requiring ever-higher safeguards.
Steady stream of new development
Auckland’s fringe and suburban markets have been responsive to development opportunities.
For example, attractive new office developments are providing occupier opportunities in the James Dilworth Centre in Parnell, the AECOM building on 8 Mahuhu Crescent, as well as at 160 Grafton Road, 162 Victoria St, the GHD Centre at 27 Napier Road, and the Nuffield Corporate Centre at 73 Remuera Road.
According to Lorne Somerville, Senior Director at CBRE, the time for companies considering their 2014-15 leasing plans is now. “The office market momentum is expected to evolve in 2013, with a steady stream of development to follow on the heels of the 29,000sqm of new space completed in 2012.
“We encourage tenants with leases expiring in 2014-2015 to maximise their opportunities by examining new buildings now to ensure they don’t miss out on the decreasing amount of stock available.”
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2012 revenue). The Company has approximately 37,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.