Christchurch Figures Q2 2024

Key Points:

• While the impact of interest rates on cap rates is beginning to lessen, buyers are also considering more than just interest rates in their pricing decisions. Shifts in supply and demand conditions, as well as the effects of vacancy rates and rental growth, are increasingly shaping investor perspectives.
• Even though there was an increase in vacant stock in both the CBD and Suburban office markets during the first half of 2024, the leasing market was very active with 108 new occupancies recorded in H1 in both markets. The office market in the CBD is transitioning into a new phase of supply. A considerable volume of Prime office space, roughly 37,000 sqm, is projected to become available between 2024 and 2026; most of it this year.
• Industrial vacancy began to rise in H1 2024 across all submarkets, following a period of extremely low levels over the past year and a half. In H1, the industrial market was tainted by downsizing of industrial footprint by several tenants because of diminished demand and consolidation.
• Prime retail rents experienced record high rental growth during Q2 (q-o-q growth of 12.0%), highlighting the strong demand for key retail locations in the CBD. This comes after a period of rental stability.