Christchurch Figures Q2 2023

Key Points:

‒Retail spend in Christchurch was robust during Q1 2023, helped by the arrival of international visitors. Prime net effective rents have been stable at the benchmarks established earlier in 2022.

‒The industrial market continued to show significant growth in recent quarters.  High demand for new and existing buildings meant that vacancy decreased significantly from its already low levels, accompanied by strong rental growth, both in the Prime and Secondary submarkets.

‒In H2 2022, there was a modest increase in office vacancy due to yet to be occupied stock additions and a few tenancy contractions.

‒While the lack of transactional activity continues to hamper calls on pricing, the interest rate influence can not be ignored. CBRE’s assessment resulted in indicative yield increases of 47-115 basis points since the end of 2021 across the various property sectors. The indicative market average capital value declined 0.1% in Q1 2023 compared to the previous quarter, lower than the drop during Q4.

‒The market expects that CPI will be back within the 3% target ceiling by H2 2024, but uncertainty remains on how quickly inflation may fall in coming quarters.