Auckland Figures Q3 2023
Auckland Commercial and Industrial Market Overview
September 21, 2023 5 Minute Read
- Recent months saw progress in the price discovery process with a greater volume of deals concluding and/or underway, some with fairly clear market price indicators. On balance, these point to continued upward pressure on yields.
- Flight to quality continues to favour Prime CBD office occupancy, which improved during H1. Despite ongoing examples of occupier space rationalisation, expansion remains a driver of new leasing activity.
- Retail centre rents are benefiting from the inflationary impacts of CPI based rent review mechanisms even as retail sales have started to soften.
- Industrial vacancy increased in the first half of the year although this was always going to be the case as the market has become so tight at end of last year (0.06% vacancy) that the only way for vacancy was up. At 0.5%, Auckland remains one of the tightest industrial markets globally.
- Over the coming year we expect a more challenging occupier market due to the subdued economic backdrop, while at the same time. unless selling pressure on vendors intensifies (which remains a reasonably probable prospect), we believe that we are now close to the top of the current yield cycle.