Auckland Figures Q1 2025

Key points:

• The RBNZ has cut the OCR by 200 basis points since August, with additional cuts forecast for this year, more so than a few weeks ago.  This shift is creating a positive context to property yields but with the degree of yield movement varying across different property sectors during Q1. 
• Recent market evidence suggests some price strengthening for industrial and, some, retail assets, especially where local private capital is involved. The office investment market shows less positive momentum.  
• Office rent changes show significant submarket and building/lessor specific diversity, reflecting underlying leasing market dynamics. Premium rents increased 0.6% in Q1.  In Grade A, the rental situation was made more complex by a mixed picture in the CBD fringe, where some lessors in campus typology buildings are increasing incentives in response to sticky and rising vacancies.
• There are indicators of an improving industrial leasing market based on recent leasing evidence of more inquiries and a new benchmark rent in Grade B.  
• Retail centre rental growth slowed down in Q1. The LFR and Major Regional categories are leading, with a 0.5% quarterly increase for each.