Auckland Figures Q2 2024

Key Points:

• Occupiers are facing increasing challenges, with the weaker demand environment prompting a shift towards an "occupier-favoured" market with higher incentives across the office and industrial sector.  Retail performance has been more heterogenous, with some centres remaining resilient, others facing downward pressures on rents, indicating a diverse occupier market dynamic.
• Vacancy results did not show a dramatic increase in either the CBD or Non-CBD office markets.  This was helped by building withdrawals, as demand contracted in H1, indicated by six-monthly net absorption of -13,000 sqm in the CBD and -7,200 sqm in the Non-CBD.
• Industrial vacancy in H1 rose from 0.5% to 1.0%, equivalent to 70,000 sqm of vacancy increase.  This was primarily driven by occupancy consolidation, backfill vacancies due to occupier relocations, and some new speculative builds.   The volume of new builds entering the market was 180,000 sqm compared to 110,000sqm of net absorption.
• Although recent quarterly data suggests that we are nearing the peak of the current yield cycle influenced by high interest rates, yields are facing some pressure from the weaker occupier market.