The overall vacancy rate for Auckland’s metropolitan office market has fallen slightly as tenants seek sustainable leasing solutions with better amenities and transport links, according to the latest research from Colliers.
Auckland’s metropolitan market includes city fringe suburbs and office space in West, East, and South Auckland, as well as the North Shore.
The overall vacancy rate recorded in March was 8.3 per cent, a drop from the 8.6 per cent noted in September last year.
Vacancy rates declined across the South Auckland, city fringe, East Auckland, and southern corridor precincts.
Start your property search
In the recently published Colliers Essentials Auckland Metropolitan Office 1H report, the Colliers Research & Economics team examined the key drivers behind tenant movements.
Hamish Fitchett, National Director of Research & Economics at Colliers, says tenants are prioritising more efficient, sustainable, and well-located prime assets with better amenities and transportation links.
“Occupiers are seeking modern, amenity-rich spaces, making metropolitan offices more attractive for occupiers who want lower costs, better parking and amenities, or proximity to staff living in the suburbs,” Fitchett says.
“When the City Rail Link opens later this year, we expect to see shifting office demand around these new stations. For example, Maungawhau Station in Mount Eden will improve commuter access to this part of the city and potentially increase office demand in the city fringe precinct.”
Cameron Whittaker, Associate Director of Office Leasing at Colliers, is leasing a new development at 9 Marewa Road in Greenlane that he says fits the bill of a prime metropolitan offering.
“A continued flight to quality is shaping the office market, with many occupiers downsizing their footprints while prioritising higher-quality space to support staff retention and workplace experience.
"This trend has remained consistent over the past 12 to 18 months,” Whittaker says.
“Against this backdrop, 9 Marewa Road stands out as one of the most cost-effective new-build offerings currently available. The project is nearing completion and benefited from having most of its structure delivered prior to the sharp escalation in oil prices and construction costs.
"As a result, achieving new-build office space in the mid-$500 per square metre range is increasingly rare in today’s market environment.
“Demand remains steady for well-located, quality space, particularly from occupiers in the 200sq m to 500sq m range across fringe and southern corridor locations.”
The report also highlighted that the North Shore market has been particularly strong in the first few months of this year.
Recent leasing activity points to ongoing interest in short-term, flexible arrangements.
At the same time, the movement of One NZ into its new CBD headquarters left a large vacancy in the market, driving up the vacancy rate in Takapuna.
This space has recently been leased and will contribute to a sharp drop in the vacancy rate going forward.
Janet Marshall, Director of Sales and Leasing at Colliers, is based on the North Shore and says the local market remains dynamic.
“On the North Shore we are seeing many smaller businesses actively looking for office premises, particularly quality fitted spaces with good parking and accessibility. Most of the clients I am speaking with are expanding,” Marshall says.
“We are continuing to see flight to quality from larger tenants, with businesses moving away from older secondary space into refurbished or better presented buildings where landlords have upgraded their premises.
“There has also been increased owner-occupier and investor demand recently, together with some larger tenants relocating their operations to the North Shore.”
- Supplied by Colliers
