Christchurch office market in good health despite higher vacancy

Leasing activity and tenant demand in Christchurch’s office property market are still remaining strong despite an increase in vacancy, according to new research from CBRE.

CBRE Research’s Q3 Christchurch Figures report shows prime CBD office vacancy has reached 9.7%, its highest level since the second half of 2020. However, this figure is heavily influenced by the large floor plate space available in the refurbished ex-IRD building on Cashel Street. 

The rest of the market remains tight with limited options for tenants, said Mitchell Wallace, Associate Director of Office Leasing at CBRE Christchurch.

“The higher nominal CBD vacancy figure is largely reflective of the bigger-footprint space in one asset, rather than an indicator of any broad-based market weakness. When you consider the number of options available, we’re still quite tight on space. We’ve seen no real change in the strong tenant demand which persists for CBD offices in smaller size ranges.”

For the office tenants who are searching for floor plates between 300sqm and 1,000sqm in size, making up the majority of the demand in the market, the situation is still very tight with few options immediately available, he said. 

“We are now well into the current cycle of lease expiries, with a number of occupiers looking at relocating to ‘right size’ their office space following their current lease terms. With availability constraints persisting, those tenants who have engaged with the market early have had greater choice out of the limited options.”

CBRE has been actively encouraging tenants in the CBD market to consider their options up to two years in advance of lease expiries, given the shortage of suitably-sized office space. 

This has resulted in an increase in average leasing decision lead times and tenants engaging with the market earlier, placing them in a better position in a competitive leasing environment.

The ‘right sizing’ trend follows changes to office utilisation rates since the Covid pandemic, said Wallace.

“Right sizing is continuing as the next cycle of lease expiries rolls through, with occupiers adjusting their leased footprint either up or down depending on how their office space utilisation has evolved. Many tenants were midway through lease terms during the Covid period, so they are taking action now to optimise their property occupation.”

Whether occupiers are looking to expand or contract their office space, one unifying trend across the market is the focus on premises quality and location.

“Demand for high quality office space in high-amenity locations is consistent across the CBD for both large and small occupiers. Corporate property decision-makers recognise the importance of attractive, contemporary fit outs, healthy workspace environments and excellent nearby amenities like transport, retail and food & beverage options when it comes to attracting and retaining staff.”

The Christchurch office development pipeline is set to present a greater choice of immediately-available options at the end of 2026 and into 2027, as upcoming new and refurbished buildings are completed, said Jorge Chang Urrea, Research Manager at CBRE.

“Vacancy is likely to increase further as uncommitted supply in new developments becomes available, but the demand for well-located prime space in popular size bands is expected to continue. This is likely to support an eventual return to lower vacancy levels as new supply is eventually absorbed.”

Rents for CBD office space have been stable during 2025, however rents are expected to increase in the coming quarters, particularly for prime offices, according to the Christchurch Figures report. 

In suburban office markets, performance is more divergent across quality grades. Prime offices in good locations are supported by consistent demand, while secondary space faces rising vacancy as tenants trade up or consolidate. Rents for prime offices are remaining firm where quality and location align with occupier preferences, for example Show Place and Lincoln Road.