Christchurch Figures Q1 2025

Key points:

• Christchurch registered several transactions in Q1 2025, shedding some light on yield movements. CBRE's Q1 evaluation suggests that the Prime industrial and Secondary strip retail submarkets experienced yield firming the first time since 2021. Yields in the former submarket went down by 20 basis points (to 5.97% from 6.17%) and in the latter by 4 basis points (to 6.77% from 6.81%).
• The Christchurch office leasing market is active with rents increasing in the CBD Secondary and Suburban Prime sectors during Q1.  Positive occupancy dynamics also led to the Prime CBD retail rent rate increasing by 1.3% in the quarter.  By contrast, activity is more subdued in the industrial leasing market with rents remaining stable during the quarter.
• The Christchurch CBD office market saw a vacancy increase from 3.7% to 8.4% due to 224 Cashel Street re-entering the market in H2 2024. However, excluding this building, the vacancy rate would be 4.1%.
• Despite increasing from 1.4% to 1.8%, industrial vacancy continues to be historically low. The increase reflects a combination of more moderate demand conditions and the market entry of new built uncommitted industrial buildings. Industrial leasing activity is currently subdued, even for well-located assets. During Q1, tenants were largely focused on prioritising efficiencies.