Commercial

Capital suffering office space shortage

There’s an acute shortage of office space in Wellington due to November’s earthquake, according to a new Colliers International survey.

Monday, February 27th 2017

Colliers International’s research and consultancy team recently conducted the first post-quake survey of the Capital’s office space and it revealed that it is at the lowest level in nearly a decade.

Just 7.8% of office space in Wellington’s CBD was vacant in January.

This is down from 10.5% shortly before the 7.8 Kaikoura earthquake in November and from 11.9% in June 2016.

Colliers International CBD office leasing specialist Steve Maitland said it is the first time the vacancy rate has dipped below 10% since December 2010 when the vacancy rate was 9.9%.

Much of the shortage is due to seismic damage following the earthquake, which resulted in about 7% of the office stock being removed from the total pool of vacant office space.

Maitland said some displaced businesses are still desperately looking for space, but options are very limited.

“Wellington is full: You could put up a sign saying, ‘the inn is closed’ – that’s how constrained the supply is.”

The demand has come in two waves, with one wave immediately after the quake.

But Maitland said that there is now a second wave of demand, which has developed since Wellington City Council ordered more seismic tests on 80 buildings last month.

“The market has gone into overdrive again as tenants consider whether to move premises and start weighing up the alternatives.

“They’re all finding out very quickly that there aren’t many options out there. There’s a real lack of large floors and contiguous spaces.”

The shortage is particularly acute for larger organisations of more than 70 people, which require 1000sq m or more of floor space.

Demand for the remaining space will ease as new buildings became available within the next year, Maitland said.

“When those new projects are complete, office space will become available in the tenants’ old buildings. But the real issue is the here and now – it’s like a game of musical chairs.”

Read more:

Govt deadline for earthquake risk masonry repair 

Comments

No comments yet

Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Wairarapa Building Society 6.95
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
BNZ - Classic 7.24
ASB Bank 7.24
ANZ Special 7.24
TSB Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
China Construction Bank 6.75
TSB Special 6.75
ICBC 6.75
ANZ Special 6.79
ASB Bank 6.79
AIA - Go Home Loans 6.79
Kiwibank Special 6.79
BNZ - Classic 6.79
Unity 6.79
Westpac Special 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
ASB Bank 6.55
AIA - Go Home Loans 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50

More Stories

Support for regulation

Monday, March 18th 2024

Support for regulation

REINZ has emphasised the need for property management regulation to Parliament’s Social Services and Community Committee.

A better investment market

Thursday, March 14th 2024

A better investment market

“Reinstatement of interest deductibility starting from the new tax year on 1 April brings property investors back in line with every other business in the country, where interest costs are a legitimate deductible expense," Tim Horsbrugh, New Zealand Property Investors Federation (NZPIF) executive committee member says.

[OPINION] Recessionary times

Thursday, March 14th 2024

[OPINION] Recessionary times

It is not the best out there for many businesses and property sector people. Sales are down across the board, our clients’ confidence is falling, and there is a lot of uncertainty.

Interest rate expectations: It’s not over yet

Thursday, March 07th 2024

Interest rate expectations: It’s not over yet

Most Kiwis think interest rate increases have peaked.