Auckland Figures Q1 2024

Key Points:

• While our recent quarterly data indicates that the top of the yield cycle is close, we expect intensified selling pressure on some vendors in coming months.  The resulting transactions will provide a clearer indication as to where the remaining gap between vendor and purchaser price expectations will settle.
• Flight to quality continues to characterise the office market. Despite ongoing occupier space rationalisation, expansion also remains a driver of new leasing activity. Due to differing impacts from new supply and occupier commitments, Prime office vacancy improved in the CBD but increased in the suburban markets.
• Retail centre rent growth is decelerating as the inflationary impetus wanes and trading conditions become more challenging, with sub regional centre rent trends tipping into negative territory this quarter.
• Industrial vacancy is under upward pressure due to an active supply pipeline and moderating demand. Industrial rent growth momentum has weakened, with market rents essentially stable during the past two quarters after a 35% to 45% increase, respectively, for the secondary and prime sectors.