Auckland Figures Q4 2023

Key Points:

• In our Q4 yield assessment, half of the 18 markets we monitor showed no change, reflecting, in our view, a narrowing of the divide between vendor and purchaser price expectations. This indicates that we are close to the top of the current yield cycle, although we expect selling pressure on some vendors to intensify over the next six months.
• Flight to quality continues to characterise the office market. Despite ongoing examples of 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 H2 in the CBD but increased in the Non CBD.
• Retail centre vacancy dropped for 4 of the 5 centre typologies. Vacancy has tended to concentrate in a handful of locations under some significant competitive pressure in their catchments
• Industrial vacancy remained stable at 0.5% in H2. After substantial increases in the past two years, industrial rent growth slowed in the past six months. The 1.3% increase in Prime rents in Q4 2023 represents the spread of recent rental benchmarks for new builds into a wider mix of geographic locations.