- Office stock completing refurbishment and strengthening works are gradually being added to total supply, with new quality office space the most sought after by tenants. The overall vacancy rate in Wellington increased marginally to 6.1%, up 20 basis points from June 2019’s 5.9%, but well below the 20-Year average of 9.5%. Prime vacancy rate remains unchanged at 0.4% highlighting the current lack of quality office space, whilst the secondary vacancy rate increased slightly from 7.3% in June 2019 to 7.7%.
- New Zealand based developer Newcrest - that recently developed the Deloitte building at 20 Customhouse Quay – has announced plans to develop another office building. BNZ Bank will have a new HQ at 1 Whitmore Street. The new building already has a green star rating design, consent and will add over 17,500 sq m of prime office space to the market when it is expected to complete in late 2022.
- NZX Listed Precinct Properties recently acquired the Dunbar Sloane Building for $5 million and will redevelop the building. Generator, the company’s feature co-working space operator, will occupy the space, the first for the capital. Upon completion, Generator is expected to provide over 2,000 sq m of flexible workspace.
- Average prime gross face rents increased to $534 per sqm up from $502 per sqm last year. Yields firmed 20 basis points to 6.4% compared to 6.6% a year ago. Average gross face CBD Core rents range between $335 per sqm to $660 per sqm. New-build activity is commanding above current benchmark rental rates.
- The largest office transaction for the 12 months to December 2019 was the sale of the Ministry of Education Building at 2 Mowbray Street (33 Bowen Street) for $82.0 million for an undisclosed yield to offshore European investors.
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