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Wellington Office Market Report
Office Market Steady
The office leasing market continues to bounce back in 2021and is now steady. The rush to sub lease, which was anticipated moving into 2021, has yet to eventuate. Tenants are maintaining a “steady as she goes” approach and retaining their office tenancy for the meantime, even though in some cases the tenancy is only fully occupied once or twice a week as the employees work from home.
New listings are at the same rate as 2019 and the vacancy rate is stable and should remain roughly the same throughout the year. Current estimates are around 10% vacancy rate.
Tenant enquiry to date has been good and but 2021 will be a further challenging year for companies as they grapple with the “new normal” of Covid and try to establish suitable office staffing levels going forward.
Some tenants are still persisting with asking for one month’s rent free per year of lease, however these days are long gone and landlords in todays market may grant one month’s rent free for a 3 year lease or 2 months rent free for a 6 year lease. In some cases they may also grant one month’s early access for setting up purposes only.
Rental Update – Current average gross rentals per annum (ex gst) are CBD core: $350 – $750 sqm. TE ARO: $240 – $370 sqm THORNDON: $240 – $350 sqm.
Report written by Tom Burke. Owner. April 7th 2021 (all rental figures in this report refer to gross rentals ex gst)