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Slow and Steady Office Leasing Market

With Wellington now back in ORANGE, office tenants are now slowly coming back to the the CBD. The government appears to be giving their tact approval in this regard and is encouraging their workers to return, although they seem to be still operating on a hot desking basis in some departments, enabling government servants to at least stay home for part of the week.

Retailers including hospo, are still taking a bit of a battering, but there are encouraging reports of an increased turnover in some sectors.

The office market to date this year has remained steady and the latest reported CBD vacancy rate is between 5% and 6%, – 2% lower than 2021. In the late 1990’s the vacancy rate was 14-15% as a comparison.

Office leasing so far this year has been on a slow but steady path pace as tenants re- assess their requirements as their office lease comes up for renewal.

Office rents for quality refurbished CBD office suites are on the increase and are now in the $500 – $750m2 (gross) range – a level only dreamed about in past years.

The Omicron outbreak still persists and remains a major risk to business in general in 2022 as well as a predicted inflation rate of over 7%

Rental Update – Current average gross rentals per annum (ex gst) are CBD core: $350 – $750m2. TE ARO: $240 – $400m2 THORNDON: $240 – $375m2.

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