Vacancy rates in Auckland's prime office towers are at their highest in a decade.
Photo: 123RF
The first Quarterly Vertical Vacancy Review by property services firm JLL indicated the vacancy rate in Auckland's central business district was 7.5 percent in the first three months of the year, with about half of those vacancies concentrated in four buildings.
It said the strong performance of large property developers, Kiwi Property Group and Precinct Properties, particularly in Auckland's Commercial Bay Precinct, had been diluted by substantial vacancies in the Shortland & Fort (formerly Lumley Centre) at 17 percent vacancy and ANZ Centre at 16 percent.
It said the drift from midtown properties, such as QBE Centre (26 percent vacancy) and SAP Tower (16 percent), were "haemorrhaging" with vacancies.
Prime office space in Wellington and Christchurch was a completely different story, with extremely low vacancies at 1.4 percent in the capital city, while land banking in Christchurch's central business district saw vacancy rates fall over the past six months.
"Since the completion of Spark HQ [in the first quarter of last year], no further large-scale [prime] office projects have emerged in the Christchurch pipeline," it said.
"Recent increases to construction costs, labour shortages, and substantial land-banking in the CBD (estimates suggest 20 percent of sites remain undeveloped) have contributed to subdued development activity."
The report suggested activity in Christchurch had shifted toward the industrial sector where more than 100,000 sqm of new build space was proposed across Christchurch precincts, especially within new industrial business parks, such as Waterloo Business Park.
