The impending opening of the City Rail Link, refurbishment of multiple buildings, and renewed tenant demand from the education sector are contributing to the potential of the office market in the Midtown precinct in Auckland CBD.
The long-awaited rail network is set to come online later this year and will provide enhanced transport options for multiple parts of central Auckland.
This is coinciding with the refurbishment of 2 Wakefield Street and Bledisloe House on Wellesley Street West as landlords look to meet future demand.
Sam Gallaugher, Director of Office Leasing at Colliers, recently leased a full floor of space at 205 Queen Street in Midtown to tertiary education provider ICL Graduate Business School, alongside colleague Kendall Grey.
Start your property search
Colliers also leased another floor in the building to Southern Cross Cable Network.
The ongoing revitalisation of Midtown has seen strong leasing activity in the office building at 87-89 Albert Street, while Colliers sold multiple interconnected office buildings, including the old Finance Centre, around Durham Street West and Victoria Street West for $104 million last year.
Meanwhile, the recent opening of the Raddison RED Auckland hotel in Lorne Street has injected further life into the area.
Gallaugher says the Midtown precinct has gone through a period of heightened vacancy but is generating renewed interest.
"Rental rates in this area are more attractive for tenants compared to some of the locations closer to the waterfront and landlords have been proactive in designing fit-outs that will appeal to occupiers," Gallaugher says.
"We currently remain positively engaged with multiple tertiary education providers seeking space in Auckland CBD and Midtown is an obvious fit for them given the new Te Waihorotiu Station will be a hive of activity when the City Rail Link opens.
"With the works now completed on Albert Street, the area is opening up and has a new feel to it."
In the middle of last year, the Government announced the International Education Going for Growth Plan that aims to grow international student numbers from 83,400 in 2024 to 119,000 by 2034.
Gallaugher says having education providers as tenants promotes further commercial activity through the need for hospitality businesses such as cafes to cater to increased foot traffic.
"The growing investment in boosting tertiary education numbers will drive demand in Auckland as students go out and spend money in the city."
Colliers recently released its latest Auckland CBD Office Essentials report that indicated overall vacancy in the office market rose to 16.2 per cent in December 2025 from 14.6 per cent in June.
Available prime space in popular precincts such as Wynyard Quarter, the Viaduct, and Britomart remains negligible.
Hamish Fitchett, National Director of Research & Economics at Colliers, says the increase in vacancy reflects the delivery of new supply and tenant relocation activity.
"Increased vacancy rates within secondary grade offices were the major contributor to this increase. Prime grade vacancy edged up slightly to 8.5 per cent compared with 8.4 per cent six months earlier, although it remains below the 9.8 per cent recorded in December 2024," Fitchett says.
"The uplift largely reflects the completion of new premium developments and the temporary vacancy created as tenants upgrade into higher-quality space.
"The general flight-to-quality trend has continued and highlights the widening gap in the office market, as older buildings struggle to compete with newer developments offering stronger environmental performance, upgraded amenities, and more efficient layouts."
- Supplied by Colliers
