Queenstown appealing to investors

The real estate agency says investors have always looked favourably on Queenstown commercial and industrial properties but with more development, opportunities were becoming more common.

“Commercial and industrial space remains in demand, and most property sectors are showing limited vacancy,” the real estate agency says.

There was a shortage of prime retail space in the CBD, it said, which was renting for between $1200 and $1500 per square metre. Demand is expected to grow over the coming year.

Demand was steady for secondary retail space, renting for between $600 and $800 per square metre.

There was also strong demand from investors, Bayleys said. They were achieving yields of between 4.5% and 5.5%.

The supply of prime office space was sufficient for steady demand from tenants, Bayleys said. It is leasing for between $180 and $260 a square metre.

Secondary office space is renting for between $150 and $200 per square metre.

Demand for both expected to remain steady over the next 12 months.

“While there is a manageable amount of vacant space in Queenstown, tenant demand for the office accommodation that is available remains generally subdued. There are cases of good quality office space remaining vacant for an extended period of time. As a consequence, rental levels have remained largely unchanged over recent years.”

That was not putting investors off, though.

Bayleys said there was not enough office space to keep up with investor demand.  Prime office space is offering investors yields of up to 6.5%. 

Tenant demand was least strong for industrial space, of all the types of commercial property, Bayleys said. There was weak demand for office showroom and warehouse space. 

Still, investors were seeking opportunities – there was a shortage of prime and secondary industrial space and steady demand.