Wellington Office Market Report
Lock Down Blues
With Wellington still being in Level 2, the office leasing market has virtually ground to a halt. Hopefully we’ll be back to Level 1 very soon and life can return to normal, possibly with masks on.
The office market to date this year has remained steady and the latest reported CBD vacancy rate is between 8% and 9% so is still relatively low.
It will be interesting this time around to see if still more employees elect to stay home assuming their employers allow them to. This would be a shame as the Wellington CBD is showing a lack of vibrancy already and without it being sufficiently populated during the day, the hospitality industry in particular will continue to suffer with a definite increase in retail vacancies appearing almost certain.
I think the average company/business once they are back to Level 1 will be hell bent in trying to produce as much income as they can between now and Christmas and Christmas will become the immediate new focus and other innovations such as downsizing or upsizing will be left til 2022 to consider further. There are going to be further tough times and we must learn to live and get on in a business world with Covid being around us. In this regard the large uptake of the vaccine is very encouraging and hopefully we’ll see a brave new world emerge in 2022
Finally 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.
Take care everyone and stay safe!
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. September 8th 2021. (all rental figures in this report refer to gross rentals ex gst)